Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

DEATH OF A MEMBER

Mr. Speaker: I regret to have to inform the House of the death of John Jakob Mendelson, esquire, Member for Penistone, and I desire on behalf of the House to express our sense of the loss we have sustained and our sympathy with the relatives of the hon. Member.

Oral Answers to Questions — INDUSTRY

Civil Aircraft (Anglo-American Projects)

Mr. Arnold: asked the Secretary of State for Industry what recent discussions he has had on future aircraft projects with representatives of Boeing, Lockheed and McDonnell Douglas; and if he will make a statement.

Mr. Whitehead: asked the Secretary of State for Industry what communications he has received from the Boeing company about possible collaborative ventures with the British Aerospace Corporation.

Mr. Tebbit: asked the Secretary of State for Industry if he will make a statement upon his discussions with United States aerospace companies.

Mr. Adley: asked the Secretary of State for Industry if he will make a statement on his recent discussions concerning the future of the British aircraft industry.

The Secretary of State for Industry (Mr. Eric G. Varley): In order to secure first-hand information about the plans of the leading American civil aircraft manufacturers, I recently invited senior

management of the Boeing, Lockheed, and McDonnell Douglas companies to visit London for discussions. Those discussions were for information, and not in any sense negotiations. The results will form part of the Government's current consideration of future civil aircraft policy. The timing of decisions on aircraft projects will depend mainly on commercial factors.

Mr. Arnold: How are the conflicting interests and ambitions of British Airways, British Aerospace and Rolls-Royce to be reconciled in these matters? Does the right hon. Gentleman agree that any future decisions should be based upon commercial criteria and upon the size of potential markets, since that would be the best way of securing employment opportunities and the interests of the taxpayer?

Mr. Varley: I thought that I had made plain that the factors that have been taken into consideration are mainly commercial. Every corporation operates within the framework of its own legislation. We have to co-ordinate as best we can. However, the hon. Gentleman's point is very much borne in mind.

Mr. Speaker: I shall call first those hon. Members whose Questions are being answered.

Mr. Whitehead: Will my right hon. Friend bear in mind that some very seductive offers can be put forward by American manufacturers for the short term in order in the long term to kill off the design capacity of the European aircraft industry? Will he also bear in mind that it is not necessary for us to go ahead on the basis of a launch order from British Airways on any of these collaborative projects, and that the sure test of the collaborative project should be British participation in design leadership and engine supply throughout the production run?

Mr. Varley: These are the factors which have been discussed with the American companies. British Aerospace has discussed them, too, with the European companies and interests. Tomorrow I shall be going to Bonn and Paris to take up these matters directly with German and French Ministers.

Mr. Tebbit: We think that it is right that the Government should have engaged in these discussions in order to ensure that no options are foreclosed by the passage of time while British Aerospace is engaged in Europe. Will the right hon. Gentleman bear in mind that if he takes notice of what the hon. Member for Derby, North (Mr. Whitehead) said, not only about the necessity for British leadership in the design of the airframe, but about the fitting of British engines, he will be foreclosing on the options for doing a deal with the French, who are excessively attached to their own engine?

Mr. Varley: I know something of the French aero engine industry, because in February I was able to go to SNECMA and take part in discussions. However, all these factors, particularly that just mentioned by the hon. Member for Chingford (Mr. Tebbit), will be borne in mind.

Mr. Adley: Is it not a simple fact that when airlines order aircraft they specify the engine just as they specify the airframe? Is it not, therefore, a dangerous delusion to believe that, merely because British Airways might specify an aeroplane with a Rolls-Royce engine, Boeing will insist on all its other customers fitting their aircraft with the same engine? Is not a Boeing partnership with British Aerospace rather like a partnership between the wolf and Little Red Riding Hood? Ought we not to consider the possibility that the Boeing 999 might be the number we should be referring to as a warning of what could happen if, as the hon. Member for Derby, North (Mr. Whitehead) said, we allow our industry to be seduced in this way?

Mr. Varley: I think that what we have to bear in mind is that no decisions have been taken at this stage, either by British Aerospace or by some of the other interests involved. I understand that British Aerospace is willing to discuss further with Boeing, but, of course, the top consideration of British Aerospace has to be given to the commitment that it has made to the European interest.
As to the first part of the hon. Gentleman's supplementary question, I understand that there is some advantage—not a total advantage—in an engine being a lead engine in any new aircraft. There is

some advantage, but it is not absolutely crucial.

Mr. Terry Walker: In view of the fact that every week we are given different accounts of what offers are being made to the British Government, and bearing in mind that the British Government have to finance these projects in any case, will my right hon. Friend give an assurance that a statement will be made to the House that will allay the fears of the workers before a final decision is made about this matter?

Mr. Varley: There will certainly be a statement made to the House in due course. As to consultations with the work force, it is our intention to consult the aerospace committee of the Confederation of Shipbuilding and Engineering Unions. We plan to do that within the next few weeks.

Mr. Cope: Will the Secretary of State ensure that in considering these matters and, for that matter, any shorter-term decisions on the future of the aircraft industry, the figures that are used to compare different projects are adjusted to ensure that they do not reflect the present disgraceful discrimination against British aircraft and in favour of American aircraft in the present set-up of our Customs duties?

Mr. Varley: Again, this is one of the factors that is being examined by the Government in a co-ordinated way and by the interests involved, British Airways and British Aerospace.

Mrs. Hayman: Does not my right hon. Friend agree, however, that the Government could accede to the request of British Aerospace for permission to go ahead with the HS146 without in any way prejudicing the options on the larger aircraft, and is it not true that it is an important commercial factor that delay is extremely damaging to the market prospects for the HS146? If my right hon. Friend does agree, when may we have the "Yes" that we need?

Mr. Varley: I know my hon. Friend's interest in the HS146, and she will know, too, that proposals have been put to us by British Aerospace. These are under active consideration. A statement will be made in due course.

Mr. Pattie: Does the Secretary of State agree that, in a complicated situation, the defence aspect is important? Bearing that in mind, does he agree that the Boeing Corporation does not seem to be the best of the American contenders, even assuming that one wants to have an American involvement at all?

Mr. Varley: That is another part of this complicated matter. I think that Boeing has 60 per cent. of the world's civil or commercial airline interests, and other American companies, of course, are much more oriented towards military aircraft. We know that our aerospace industry is weighted in the military field, too. But I think that we must look at all these options and come to conclusions which are in the best interests of the British industry.

Mr. Speaker: I shall call one more hon. Member from each side of the House on these Questions.

Mr. Hoyle: Will my right hon. Friend say whether in considering the longer-term plans he has had any talks with British Airways about the BAC111 and the possibility of buying that aircraft instead of the Boeing, and whether failure to buy that aircraft could affect our plans to sell it to the Japanese?

Mr. Varley: I am not responsible for British Airways. As my hon. Friend knows, that responsibility lies with my right hon. Friend the Secretary of State for Trade. However, I can tell my hon. Friend that I engaged in discussions with my right hon. Friend at a joint meeting that took place between British Airways and British Aerospace, at which we asked them to take this factor into account. I understand that both corporations are talking to one another.

Mr. Rost: Why, in the meantime, is the Minister holding up finance for the development of the derivatives of the RB211 engine which will be needed in order to secure the future for Rolls-Royce in any case, whatever tie-up the Government finally agree with either American or European interests, or with both?

Mr. Varley: We are not holding up finance for the further development of the RB211–535. It is wrong for the hon. Gentleman to suggest that we are doing that. We have received proposals by way

of the National Enterprise Board on the RB211–535. We are considering this. Of course, it is part of this whole question, as the House understands.

Industrial Strategy

Mr. Kenneth Clarke: asked the Secretary of State for Industry whether he will make a statement on the progress of the Government's industrial strategy.

The Minister of State, Department of Industry (Mr. Alan Williams): Encouraging progress is being made in the development of the industrial strategy. The key task this year is to obtain action at company level on the findings and recommendations of sector working parties.

Mr. Clarke: Why does it remain part of the Government's industrial strategy to persist in trying to find ways of allowing trade unions to put nominees on the boards of British companies? Does not the Minister recognise that the continued threat of legislation in this field is damaging confidence among British management and deterring many foreign investors from putting their money in this country?

Mr. Williams: The hon. Gentleman should have spoken to the major multinational to which I spoke last week in the United States, which spoke glowingly of the prospects which it saw arising from the presence of worker representatives on the boards of its subsidiaries in Germany.

Mr. Robinson: Does my right hon. Friend agree that a key element in the success of the Government's industrial strategy would be the success of the British-owned motor car industry? Does he further agree that its success is being gravely threatened by the growing level of imports from Japan, which seems to be in marked contradiction to the undertakings that the Japanese have given to the Government? Therefore, will he, together with his right hon. Friend the Secretary of State for Trade, take up this matter again with the Japanese and set up a system for monitoring shipments from Japan, because that is what will determine the level in the future?

Mr. Williams: My hon. Friend can be assured that the Department of Trade and my Department are aware of the problem. But I think that it has to be


accepted that, because of the large existing levels of stock at the beginning of the year, it was perhaps inevitable that it would take a little time for the agreed figures to be attained. For that reason, we are doing exactly as my hon. Friend said. We are keeping a close check on shipments and on prospective future shipments.

Mr. Alan Clark: When the Ministers consider the progress of the industrial strategy, do the right hon. Gentleman and his right hon. Friend ever reflect on the ease with which manufactured goods of foreign origin enter this country and the difficulties that are placed in the way of those who manufacture such goods in this country and wish to export them?

Mr. Williams: Of course we do. That is why we are taking part in the multi-trade negotiations—to try to ensure that tariffs and barriers are removed wherever possible. Indeed, on a recent visit to Japan we discussed with MITI this very point—that there needed to be better access for British goods to the Japanese market.

Mr. Roy Hughes: How many more factories have to close and how many more people have to be put on the dole before the Government finally act and introduce a policy of import controls, as put forward by the Cambridge Group of economists and backed by the trade union movement? Does not my right hon. Friend agree that, whether it be in cars, electronics or steel, in Britain's present economic circumstances a policy of free trade is no good for Britain?

Mr. Williams: I think that my hon. Friend should understand one simple fact. A retreat from free trade would be in the worst interests of Britain, because Britain relies essentially on clear access to overseas markets. Action has been taken in relation to imports of cars and colour television sets from Japan. These actions have been taken at an industry level, and the Government are quite convinced that they will be satisfactory.

Sir K. Joseph: Is it not humbug for Ministers to prate about an industrial strategy when excessive Government spending leading to excessive Government borrowing and excessive marginal rates of direct taxation, at all levels, is

doing such savage harm to jobs and activity in the economy?

Mr. Williams: I admire the right hon. Gentleman's dedication to the gospel that he continually preaches. I would only point out that, in contradiction to the trends that one would expect if his gloom were justified, investment and production are rising, and inflation and unemployment are falling. That is not a bad attainment.

Hull Telephone Department

Mr. Neubert: asked the Secretary of State for Industry whether he has reached a decision on his renewal of the operating licence for the Hull telephone department; and if he will make a statement.

The Minister of State, Department of Industry (Mr. Gerald Kaufman): Discussions have been taking place between Kingston upon Hull City Council and the Post Office on detailed matters concerning the question of a long-term licence. A decision will be taken when we have been able to consider the outcome of these discussions.

Mr. Neubert: As the continued independence of the Hull telephone department is a considerable asset as a test of efficiency and service to the public, by comparison with the nationalised monopoly, will the Minister ensure that a favourable decision is reached at the earliest opportunity to avoid further uncertainty and prejudice to forward planning?

Mr. Kaufman: I am glad that the hon. Gentleman supports the Labour-controlled council's views. We are considering these matters carefully and shall announce a decision when we are ready.

Aircraft and Shipbuilding (Trade Unions)

Mr. Palmer: asked the Secretary of State for Industry if he will make a statement on the recognition of trade unions for collective bargaining purposes under the Aircraft and Shipbuilding Industries Act, stating which unions, either at national or local level, have been recognised, the grades of employees covered in each case, the date when the agreement was made, and the grades of employees in each industry as yet not covered by agreements but where recognition has


been sought, either for all employees or for members of particular trade unions.

The Under-Secretary of State for Industry (Mr. Les Huckfield): The recognition of trade unions is a matter for British Aerospace and British Shipbuilders.

Mr. Palmer: That is excellent advice—that it is ultimately a matter for the boards of the industries concerned. However, may I take it that that is subject to the ever-ready advice of the Advisory, Conciliation and Arbitration Service?

Mr. Huckfield: I take careful note of my hon. Friend's kind remarks. He is of course right. I should add that my right hon. Friend has no power to issue directions on this matter.

Mr. Warren: What has happened to all the promises given by the Government about industrial democracy throughout the debates on the Bill which nationalised these industries? Is the hon. Gentleman aware that throughout the aerospace industry the shop floor is shocked that it is not being consulted on any future projects and that it feels that it is neglected by the Government that it put in power?

Mr. Huckfield: The hon. Gentleman is a bit out of date. We have already received one report on industrial democracy, on 6th December, which was placed before the House. My right hon. Friend expects the second report before 30th June.

British Productivity Council

Mr. Durant: asked the Secretary of State for Industry when he next plans to meet the chairman of the British Productivity Council.

Mr. Les Huckfield: My right hon. Friend the Secretary of State has met the chairman of the British Productivity Council on a number of occasions, but there are at present no plans for a further meeting.

Mr. Durant: Will the hon. Gentleman agree, in spite of the slight upturn in productivity, that there is an essential need to increase this nation's productivity, which is falling sadly behind? In his discussions with the chairman of the

council, will he discuss wage costs per unit, which are now escalating alarmingly in a way which will affect productivity and wage costs?

Mr. Huckfield: I hope that the hon. Gentleman will recognise that our wage costs per unit are among the lowest in Europe. I hope that he will also take into account the fact that, with inflation down to 8 per cent., manufacturing investment up 14 per cent., our decline in the share of world trade halted and employment in manufacturing actually rising until February this year, that is not a bad record.

Mr. Gwilym Roberts: But, in view of the important contribution to productivity made by sector working party reports, will my hon. Friend accept that there is some disappointment on both sides of industry and there is a feeling that the Department is passing the buck, since it has now suggested that many of the recommedations of those working parties should be worked out in the companies rather than being given a direct departmental lead?

Mr. Huckfield: Although I take note of what my hon. Friend says, I cannot agree with him. I should not like him to think that my Department has in any way abandoned the sector working parties. It takes careful note of what they say and is anxious to ensure that their recommendations get down to company level.

Lucas Aerospace (Shop Stewards' Proposals)

Miss Joan Lestor: asked the Secretary of State for Industry whether his Department is prepared to meet the combined shop stewards' committee of Lucas Aerospace.

Mr. Hoyle: asked the Secretary of State for Industry why his Department has consistently refused to meet the Lucas Aerospace combined shop stewards' committee in connection with job maintenance and job creation.

Mr. Thorne: asked the Secretary of State for Industry why his Department has not directly discussed the Lucas Aerospace combined shop stewards' committee's corporate plan in relation to the recent redundancy announcement of Lucas Aerospace management.

Mr. Kaufman: I met members of the committee in a delegation brought to see me by my hon. Friend the Member for Birmingham, Yardley (Mr. Tierney) in December 1975. The recently announced proposals of Lucas Aerospace are being discussed with the proper negotiating body representing the interests of the Lucas Aerospace workers in all unions and at all sites, namely, the Confederation of Shipbuilding and Engineering Unions, with which Ministers are in frequent contact, and with which I have discussed the problems of Lucas Aerospace. Either side can propose topics for meetings and it is for the confederation to decide who will attend on its side.

Miss Lestor: Will not my hon. Friend agree that, since the management of Lucas has consistently refused to meet the shop stewards' committee, it would be a good idea and also in the interests of industrial democracy if he could intercede and meet them directly himself?

Mr. Kaufman: As I have explained to my hon. Friend, I have already met them myself. I have also interceded several times via the Confederation of Shipbuilding and Engineering Unions. The confederation, having met Lucas Aerospace last month, is due to meet it again next month. If it is appropriate for the combine to be represented there, of course the confederation will decide to do so.

Mr. Hoyle: Will not my hon. Friend agree that there is some difficulty with the confederation in relation to this? Will he not try to bridge the gap by getting the Lucas directors to meet the shop stewards and perhaps implement this socially useful plan? Does this matter not also point to the need for workers' democracy, when the workers can produce such a useful plan which can be faulted by no one?

Mr. Kaufman: I accept that these matters have not proceeded as satisfactorily as they might. However, my hon. Friend says that there are difficulties with the CSEU. He himself is an officer of one of the leading unions in the CSEU. The confederation has made it clear to Ministers time and again that it would very much resent it if its normal trade union machinery were bypassed. Indeed, only a short time ago, AUEW (TASS) issued a statement to its officials, in which it said:

It is not in the interests of our common objectives to ignore the democratic procedures of our movement. Members of unions can win policies if they are prepared to use the democratic structures which exist in various forms, in every union.

Mr. Thorne: Will not my hon. Friend recognise that, with the continuous threat of redundancy affecting the workers in Lucas Aerospace, it is the Government's responsibility to intervene, in spite of the usual institutional arguments that he now puts forward—that it might offend certain union leaders in the confederation?

Mr. Kaufman: The "usual institutional arguments" are the normal procedures of the trade union movement. Although my hon. Friend may feel that he can set those procedures aside, I, as a member of the Government, have to work every day with the confederation. It is not possible for me to set aside its procedures in favour of any body which wishes to set them aside.

Mr. Tebbit: Does the Minister understand that we do not want to intrude on this bureaucratic mumbo-jumbo of an argument between him and his trade union friends but that we would like him to come to the point behind these Questions? Does he think that the Lucas directors are perversely or malevolently throwing away the chance to enter into good business and make profits—or does he think that the truth is that those ideas are nothing more than another mare's nest dreamt up by his hon. Friends?

Mr. Kaufman: The hon. Member seems, like his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), to believe that private industry in this country operates in a state of perfect competition. If that were so, the kind of intervention for which his hon. Friends constantly ask would not be required from this Government. As it happens, when it comes, for example, to the question of proposed redundancies in Lucas Aerospace, we do intervene. I myself called in the management on that matter and made it clear to it that propoer consultation with the confederation and the work force was essential.

Mr. Skinner: Will my hon. Friend concede that there are some occasions—perhaps not too many; some would argue about the balance—when the rank and file are just marginally in front of their


progressive leadership? Looking at the matter from that angle, will he not concede the argument in regard to the Lucas proposals?

Mr. Kaufman: I know that my hon. Friend might take that view with regard to the NUM. I prefer the progressive leadership.

Mr. Adley: Is not the Minister aware that these proposals have nothing to do with the level of productivity achieved by the work force over the years at Lucas? If the workers want to produce a new range of supersonic caravans, surely it is up to the Government, who are so profligate with taxpayers' money, to give them everything they want.

Mr. Kaufman: The hon. Gentleman's derision does no justice to a series of very constructive proposals put forward by the Lucas work force. The problem is to ensure that those proposals are considered within the proper structure between the union and the trade union movement. His derision of those plans does him no credit

National Economic Development Council

Mr. Rooker: asked the Secretary of State for Industry when he next expects to attend a meeting of NEDC.

Mr. Varley: I will attend the NEDC's next meeting on 7th June.

Mr. Rooker: In view of the totally unsatisfactory and negative nature of the answers to the previous Questions today, when my right hon. Friend next meets the NEDC will he ask for the Lucas problem and the urgency of the situation to be put on the agenda, and for the matter to be placed in the sector working party system?

Mr. Varley: I doubt very much whether that matter will come up at the next meeting of the NEDC. I have nothing to add to the answers which have already been given by my hon. Friend the Minister of State.

Mr. Michael Marshall: Will the Secretary of State take the opportunity when next he meets the NEDC of correcting the problem mentioned by the Minister of State this afternoon in describing the industrial strategy? The Minister of State,

in the optimistic view he advanced, based on the generosity of his American hosts, has confused the House and the country. Therefore, will the right hon. Gentleman define that industrial strategy?

Mr. Varley: I have done so on previous occasions, and it would take a much longer time than Question Time to do so again now. One of the great strengths of the industrial strategy is that it has been put on a tripartite basis. I, along with the right hon. Member for Leeds, North-East (Sir K. Joseph) and others, was present last week when the president of the Confederation of British Industry paid tribute to all those taking part. He said that the CBI, in common with the TUC, was totally committed to that strategy. It is trying to reverse the relative decline that has taken place for 20 or 30 years or more. What is more, these efforts are beginning to succeed, and I hope that the system, provided it is given a chance, will succeed and that Members of the Conservative Party will start to pay tribute to it—and at the same time will pay tribute to the many Conservatives who are contributing to that policy.

Mr. Ashley: Will my hon. Friend bear in mind when next he meets the NEDC that it is damaging to economic development if important regions are allowed to suffer severe plant closures without Government action or remedial measures being taken to prevent such closures? For example, does he appreciate that in North Staffordshire we are threatened with steel closures and bakery closures and that thousands of men and women are liable to become unemployed as a direct result of Government policy? Will the Secretary of State undertake a special investigation into the serious problems of North Staffordshire?

Mr. Varley: Of course I shall take note of the serious problems of North Staffordshire. I know that there are further Questions on the Order Paper concerning the steel industry. I have had discussions with my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) and his colleagues in the West Midlands group of Labour MPs on the subject of Shelton and Bilston. I promise that the British Steel Corporation, in discussion with the TUC steel committee, will take fully into account the effect on the areas concerned.

Northern Region

Mr. Radice: asked the Secretary of State for Industry whether he is satisfied with industrial progress in the Northern Region.

Mr. Alan Williams: We shall continue to do everything we can to promote investment and employment in the Northern Region.

Mr. Radice: Does my right hon. Friend agree that, despite the considerable amount which has been achieved, the Northern Region is still suffering from very high unemployment and severe structural problems? Is he aware that at the meeting of the Northern Regional Council Labour Party last weekend unanimous support was given to a report calling for better co-ordination of regional policy? Will he examine the proposals in that report?

Mr. Williams: I share and understand my hon. Friend's concern about the level of unemployment. I am encouraged by the fact that the rate of letting of Government factories has improved markedly in the Northern Region. Whereas only 11 were let in 1975–76, I understand that 21 were let in the following year and 41 last year. Already since 5th April nine of our factories in the region have been reserved. Clearly, I shall wish to examine the results of the conference to which my hon. Friend referred. If there is practicable action that can be taken to improve co-ordination, the Government will take such action. But we already have a planning board to co-ordinate the work of Government Departments in the region.

Sir T. Kitson: Does not the Minister realise that when he removed a large part of North Yorkshire from development area status he only aggravated the situation in that area? Does he appreciate that many people from Teesside work in North Yorkshire and that many companies are not now going ahead with development plans in that area? Therefore, will he reconsider his decision?

Mr. Williams: That is a completely different question. The Question relates to the Northern Region and not to the Yorkshire and Humberside Region. If the hon. Gentleman wishes to table a Question on that subject, he has the opportunity to do so. I have seen deputations

from North Yorkshire and we have discussed in detail the area's problems. As yet, there is no evidence to justify the hon. Gentleman's statement that projects in the area are being turned away. I am convinced that the selective approach still available to us and the area's current status are adequate.

Mr. Conlan: Will my right hon. Friend reflect on the representations which he has already received on the establishment of a national boiler company? He will recognise that there is widespread concern in the Northern Region. Will he undertake to meet representatives from the region as soon as possible before further progress is made on these lines?

Mr. Williams: My hon. Friend was kind enough to convey to me the concern of his constituents on various occasions about the possible impact of the proposals. I have had meetings with the CSEU, and should my hon. Friend wish to bring a group of his constituents to see me I shall be only too happy to talk to them.

Sir W. Elliott: Will the Minister take note of the fact that in answer to a Question, in which I asked for the number of bodies other than direct arms of Government Departments in the NoNrthern Region receiving subsidies and how much they were receiving, I was told that no central information was available? Does he agree that, despite the amazingly high unemployment rate in the Northern Region, there is still a fantastic shortage of skills and a number of unfilled skilled vacancies?

Mr. Williams: I shall bear those points in mind, and I shall convey them to the relevant Minister in the Department of Employment. I do not recollect the parliamentary reply to which the hon. Gentleman referred, but I shall examine it to see whether there is any further information I can provide.

Lucas Aerospace (Shop Stewards' Proposals)

Mr. Russell Kerr: asked the Secretary of State for Industry whether he is prepared to support the development by workers at Lucas Aerospace of a powered wheel for aircraft which reduces noise and waste of fuel in taxi-ing operations in and around airports.

Mr. Les Huckfield: My Department is willing to consider any specific proposals for Government support for research into new technology, or the development of new products, in the civil aerospace field.

Mr. Kerr: That is a rather disappointing answer. In the meantime, will the Minister pay his tribute to the initiative and constructive proposals in the Lucas shop stewards' corporate plan?

Mr. Huckfield: I thought I gave my hon. Friend a rather encouraging reply. If he examines the various aspects of work in the corporate plan, which I have studied in some detail, he will find that research and development work is already taking place in various Government Departments and organisations. These operations include solar heating, windmills, braking systems, electric vehicles, heat pumps, oceanics, applications of micro-processors, kidney machines, aids for the blind, aids for spina bifida patients, and powered undercarriages for aircraft.

Mr. Biffen: Does the Minister know whether the Lucas aerospace combined shop stewards, who have featured so prominently in this afternoon's Question Time, have taken this proposed development to either the National Research Development Corporation or to the National Enterprise Board and, if so, with what consequences?

Mr. Huckfield: I cannot give an up-to-date report on that matter without notice.

Manufacturing (Investment)

Mr. Knox: asked the Secretary of State for Industry whether he proposes to take any new measures to increase investment in manufacturing industry.

Mr. Clemitson: asked the Secretary of State for Industry if he is satisfied with the current level of investment in manufacturing industry.

Mr. Alan Williams: Manufacturing investment, excluding iron and steel, has increased considerably and encouragingly in the last 12 months.

Mr. Knox: Does the Minister realise that the restoration of confidence in manufacturing industry and an increase in the demand for its products have far more to contribute to increasing investment

in manufacturing industry than schemes involving the direct use of Government money? When will the Government take steps to improve confidence in manufacturing industry and to increase the demand for its products?

Mr. Williams: It is this complete lack of understanding of what is taking place in the economy that amazes me every time I hear the Opposition on this subject. They never seem to learn. The fact is that last year investment in the private sector increased by 14 per cent. In real terms—and the increase was in real terms—the investment was higher last year than it was under the Conservative Government in 1972 and 1973. If the guide is the way in which investment increases, I wish to make clear that the plans for the machine tool industry in the current year envisage a higher rate of investment than for any of the last eight years—in other words, since the Labour Party was last in Government. In the non-ferrous foundry sector, there are plans that will give a two-fold increase over the rate of investment in the last four years.

Mr. Clemitson: While one agrees that we need more investment in industry, and while the latest figures are to be welcomed, will not the result of investment in industry often mean in the long run that there will be less employment in industry? Is it not essential therefore, if we are to reap the full benefits of increased investment in terms of increased wealth, to have, in parallel with the programme of increased investment, a programme of expanding job opportunities in the public service sector and the development of non-work alternatives for unemployment such as shorter working lives and greater educational opportunities?

Mr. Williams: These alternatives are matters to which the Government have been giving attention; hence many of the proposals that have come from the Department of Employment. My hon. Friend is right in saying that implicit in many of these sectoral schemes is the proposition that productivity must improve and that therefore extra output may be attained without necessarily providing massively extra employment, though under the schemes that have been put forward so far 22,000 extra jobs will be created. More importantly, because


of the difference that the schemes will make to the balance of payments, they will enable the economy to be operated at a higher level and thereby indirectly create jobs.

Mr. Kenneth Clarke: Does not the Minister accept that there is no investor who is not willing and able to raise his money on the market for a project so long as he has confidence that he has markets for his products and a return on his investment? Does he not accept that it is the failure of the Government to create that atmosphere of confidence which makes his various sectoral schemes necessary?

Mr. Williams: My interpretation is different. My interpretation is that the level of investment under the Labour Administration is higher than it was under the Conservative Administration because business can see that we can run the economy better than can the Conservative Party. The Conservative Party should look at the facts. Under the industry schemes there has been E1·5 billion worth of new investment projects, and the Conservative Party is tonight to vote against more money for those very schemes.

Mr. Ioan Evans: If we are to have increased investment in manufacturing industry, will my right hon. Friend use the instruments of the National Enterprise Board and the Welsh and Scottish Development Agencies, which are doing a grand job in this respect? If we are to give huge funds to the industry, will the Government ensure that we get a share of the equity of those enterprises for the benefit of the people?

Mr. Williams: Where appropriate, equity participation is discussed with companies. My hon. Friend will see from forward projections of public expenditure that it is envisaged that the NEB and the Scottish and Welsh Development Agencies will continue to play a major role in the regeneration of industry.

Mr. Hordern: Is it part of the Government's industrial strategy that the Government should have to increase interest rates almost to record levels in order to attract funds to the Government to fund their borrowing requirement and away from industry, to which otherwise the funds would have gone?

Mr. Williams: It is shattering to find that, while the Conservative Front Bench seems to have no understanding of the domestic economy, those on the Conservative Back Benches have no understanding of the international economy. I should like to point to what has been happening to interest rates worldwide, particularly in relation to the United States. Perhaps when Conservative Members have done a little elementary homework they may understand what is happening.

British Steel Corporation

Mr. Michael Marshall: asked the Secretary of State for Industry when he next expects to meet the chairman of the British Steel Corporation.

Mr. John Ellis: asked the Secretary of State for Industry when he next proposes to meet the chairman of the British Steel Corporation.

Mr. Varley: On 26th May 1978.

Mr. Marshall: Will the Secretary of State tell the chairman, when they meet, how much he approves of the recent joint venture between Redpath Dorman Long and the Dutch consortium which is to take over the metal oil platform erection business? Will he go further and say how much he would like the British Steel Corporation to seek more of these joint ventures, which will reduce the demand on the taxpayer and lead to a wider European framework of joint ventures for the corporation?

Mr. Varley: I can do no better than pass on the hon. Gentleman's comments to the chairman of the British Steel Corporation.

Mr. Ellis: When my right hon. Friend meets the chairman of the British Steel Corporation, will he make clear that he is looking to the chairman, in the current negotiations with the TUC steel committee, to come out of those discussions with full agreement with the trade union side? Does my right hon. Friend agree that it is highly desirable that he does not at the end of the day simply adopt the British Steel Corporation's ideas but should involve the trade union movement and should continue the discussions, and that any workers fighting to save their plants or looking for investment in their plants should be given the opportunity to put forward their case so that


they may have some of the confidence that has been sadly lacking in the plans of the British Steel Corporation since the end of the war?

Mr. Varley: I am not only meeting the chairman of the British Steel Corporation on Friday this week; I am meeting the TUC steel committee on Wednesday this week. One of the items on the agenda is the possibility of direct worker participation on the board of the British Steel Corporation in line with Government policy. I, like my hon. Friend, am keen that workers should participate.

Sir A. Meyer: Will the right hon. Gentleman arrange for me to receive a reply to the question that I asked in the Second Reading debate on the Iron and Steel (Amendment) Bill on 11th May, namely, what has happened to the British Steel Corporation's calculation that an expanded Port Talbot would supply Shotton with hot rolled coil a great deal more cheaply than Shotton could possibly make it, now that the exanded Port Talbot scheme is not to go ahead?

Mr. Varley: I recall the hon. Gentleman's speech on that occasion. I am sorry if he has not received a reply. I thought that during the debate I gave an undertaking to write to him. I will look into the matter. I have not been briefed on that aspect

Mr. Roy Hughes: Will the Secretary of State impress upon the chairman of the BSC that the policy of closures and redundancies cannot continue indefinitely and that the strategy of the 1960s might not be relevant to the late 1970s? Does he not agree that a policy of flexibility is now needed in steel strategy together with a major cut-back in the 5 million tonnes or so of steel that is still coming into the country?

Mr. Varley: The BSC must get its finances straight as quickly as is practicable. My hon. Friend will know that in the last financial year BSC, in common with many comparable steel companies overseas, lost money. It lost £440 million. Part of the Government's policy is that the financial objectives of the BSC should be to break even by the financial year 1979–80. We must approach these matters sensibly. One of the major factors is trying to bring demand into line with capacity. That will inevitably lead to

some problems in some areas, but I think that the whole House will agree that we are dealing with the problem sensibly and humanely.

European Community (Steel Industry)

Mr. Dykes: asked the Secretary of State for Industry when he next intends to meet Commissioner Davignon in Brussels to discuss problems affecting the steel industry in the EEC member States.

Mr. Kaufman: At present my right hon. Friend has no plans to do so.

Mr. Dykes: Does the Minister of State agree that the problem of over-capacity in European steel can be solved only in the EEC context and that already the suggestions made by Commissioner Davignon have been helpful in taking all the member States' steel industries forward together in a difficult climate? Does he agree that if redundancies are inevitable they must be carried out gradualistically and in a humane way in a European context and not just nationally?

Mr. Kaufman: What the hon. Gentleman says is unexceptionable. We need to work within the Community for a sensible approach to the steel industry. The Davignon approach is helpful in many respects. I am glad about the hon. Gentleman's remarks about the need for generous redundancy payments where closures have taken place.

Mr. Ashley: Is the Minister aware that he will be making a grave error of judgment if he condones the closure of Shotton steel works, because he will be defying steel workers, defying Members, of Parliament, defying the TUC steel committee and—because that steel works can be profitable with an arc furnace—defying logic?

Mr. Kaufman: These are not matters which we have discussed with Commissioner Davignon. We stated our position in the White Paper, and discussions are taking place on that basis.

Mr. Biffen: Is the hon. Gentleman aware that if one has to choose between the Continental aristocracy there is more to be said for the free trade views of Count Lambsdorff than for the protectionist and cartel attitude of Viscount Davignon?

Mr. Kaufman: It ill becomes me to distinguish between one Continental aristocrat and another. They are all the same as aristocrats, but it just so happens that Commissioner Davignon's approach to the steel industry's problems has been helpful and we hope that it will continue to be so.

Mr. Hardy: Is it not the case that, no matter from what source, there has been a great deal of progress in the last year or so? Could not that progress be even further encouraged if my hon. Friend's Department were a little more decisive in approving job evaluation schemes and other productivity deals, certainly in the South Yorkshire area?

Mr. Kaufman: I well understand the problem to which my hon. Friend has drawn attention. We are doing our best to expedite these matters, but he will know that they have to be conducted within the framework of the Government's pay policy.

Lucas Aerospace (Shop Stewards' Proposals)

Mr. Madden: asked the Secretary of State for Industry what is his Department's policy in respect of the Lucas Aerospace workers' proposals for product diversification in that company.

Mr. Kaufman: Ministers have consistently welcomed the initiative of the Lucas Aerospace shop stewards in preparing constructive proposals for the future of their company.

Mr. Madden: Does my hon. Friend agree that it is entirely unacceptable for Lucas Aerospace to be expanding abroad while it is contracting at home, closing plants in Liverpool, Bradford and Shipley and smashing up the foremost design teams in the world? Does he believe that such actions run contrary to the national interest, and will he intervene to point out the national interest to the firm and that it should act in a way that is consistent with our best employment interests?

Mr. Kaufman: I have done so. I have discussed these matters with Lucas Aerospace since it announced its proposals for redundancies, and I have drawn particular attention to the possible impact of those closures on areas of high and chronic unemployment in the North of England.

As a result of my intervention, my officials are in discussion with the company to see if anything can be done to assist my hon. Friend's area and Merseyside.

Mr. Alan Clark: Will the Minister agree that "pointing out" and "drawing attention to" are no substitute for the hard defence orders which would restore employment in this factory?

Mr. Kaufman: They are also no substitute for the Government having the ability, as we have in the case of nationalised industries, to have some close influence on what takes place. As always, the hon. Gentleman is drawing attention to the inadequacies of private enterprise.

Mr. Rooker: Is my hon. Friend aware that the Lucas Aerospace directors recently told some of my hon. Friends and myself that the Opposition spokesman on defence, the hon. Member for Stretford (Mr. Churchill), was directly responsible for Lucas losing a contract in the aerospace field, which put workers out of work? Is my hon. Friend aware also that Lucas has a part stake in a workers' co-operative in Yugoslavia, where there is workers self-management, and that is not exactly reciprocated in this country? Will he put that also to the Lucas directors the next time he meets them?

Mr. Kaufman: I do not think that I could put it as well as my hon. Friend puts it, and I am grateful to him for drawing attention to the maverick activities of the hon. Member for Stretford (Mr. Churchill) and his lack of concern for the true interests of workers in Lancashire.

Oral Answers to Questions — DIRECTOR OF PUBLIC PROSECUTIONS

Mr. Rooker: asked the Attorney-General when he next expects to meet the Director of Public Prosecutions.

Mr. Skinner: asked the Attorney-General when he next intends to meet the Director of Public Prosecutions.

The Attorney-General (Mr. S. C. Silkin): Quite soon.

Mr. Rooker: When my right hon and learned Friend next meets the DPP


will he ask him to take action to interview the 1,960 people in Birmingham and the West Midlands who, in a recent court case, were alleged to have received gifts from the Bryant building company and, if necessary, set up a special office in Birmingham to do that job so that no judge in future can again describe Birmingham as a municipal Gomorrah?

The Attorney-General: The Director of Public Prosecutions has already considered with very great care all the facts involved in that case, has had prolonged and very careful advice from counsel and has considered the matter with myself and my Department. I am quite satisfied that all that requires to be done in relation to prosecutions has already been done.

Mr. Christopher Price: Will my right hon. and learned Friend consider, in relation to the case that finished on Friday in the Divisional Court, where it was found that a mere arrangement had been frustrated, whether his conversations with the DPP, which authorised the Director to use such phrases as
flouting the direction of the court
when there had been no such direction, were proper? Will he consider whether such statements, which were repeated in all the newspapers, when there was no direction of the court at all, were so prejudicial to the defendants as themselves to constitute contempt?

The Attorney-General: I understand that there is a later Question on contempt of court on the Order Paper.

Mr. Skinner: Can the Attorney-General tell us whether the DPP is pleased that some of the loose ends of some of the London and County scandals have been tied up with the arrest of Gerald Caplan and some of his associates? Would he be even more pleased if he were able to tie up some of the loose ends of the Poulson inquiries relating particularly to the Malta hospital contract and the question of arresting, or at least charging, Dr. Kenneth Williams, who was involved in that matter, along with some other notables?

The Attorney-General: The London and County matter is sub judice and extradition proceedings are being taken. On the other matter to which my hon.

Friend referred, I have already answered the same question from him not less than five times, and the answer remains the same.

Oral Answers to Questions — NORTHERN IRELAND

Mr. Biggs-Davison: asked the Attorney-General what report he has had from the Director of Public Prosecutions for Northern Ireland about the operation of the Criminal Jurisdiction Act.

The Attorney-General: The Director of Public Prosecutions for Northern Ireland has reported that one case has been instituted under the provisions of the Criminal Jurisdiction Act 1975. This case involves three persons who have been returned for trial to the Belfast City Commission for offences including the extraterritorial offence of murder in the Republic of Ireland and possession of firearms in that jurisdiction. The trial of these persons is pending.

Mr. Biggs-Davison: In view of public concern about the number of fugitives from justice who find refuge in the Republic of Ireland, would the right hon. and learned Gentleman consider making, at his convenience, a full statement to the House on this matter, bearing in mind the assertion made by the Taoiseach that full use is not being made of this legislation and also his invitation to resort to the Offences Against the Person Act 1861 in cases of murder?

The Attorney-General: On the question of a full statement, the hon. Gentleman knows that my right hon. Friend the Secretary of State for Northern Ireland has answered a number of questions on this subject and has made statements. There is co-operation. It is true that there are many fugitives from justice in the South, but the hon. Gentleman will also know that the vast majority of them are people who are alleged to have committed offences prior to 1st June 1976 and it is only in relation to offences since that date that the provisions concerning extraterritorial offences apply. I have every reason to believe that co-operation betflween ourselves and the South is good.
Of course, we have always been able to take advantage of the 1861 Act in relation to the extra-territorial offences to


which it relates and, where necessary, we shall use that in addition to, or in lieu of, the new Act.

Mr. Gow: Is it not the case that the law of extradition as applied in the Republic to those whom we would wish to prosecute for alleged terrorist offences in the United Kingdom is unsatisfactory? Can the Attorney-General tell us that representations have been made and are being made through the Foreign Office that the Irish Government should alter their law in this regard?

The Attorney-General: I do not think that it is for me to criticise the law of another country. Extradition is another matter with which my right hon. Friend the Secretary of State for Northern Ireland has dealt on a number of occasions. We are well aware of the use of the border, and we are doing our best, together with the South, to solve that problem.

Oral Answers to Questions — LAW OF CONTEMPT

Mr. Christopher Price: asked the Attorney-General how many representations he has now received in response to the consultative document on the reform of the law on contempt.

The Solicitor-General (Mr. Peter Archer): The Green Paper on contempt of court was published on 21st March and my noble Friend has received four representations to date; further time is bound to elapse before all comments on the Green Paper have been received.

Mr. Price: I thank my right hon. and learned Friend for that reply and I hope that I may get something out of him that I failed to get out of his senior. In view of the case that finished on Friday, in which it was found that there was a mere arrangement that had been frustrated and that there never had been any direction of the court, and as statements from the DPP, which used phrases such as
flouting the direction of the court
and
contrary to the direction of the court
were authorised, does my right hon. and learned Friend think that those statements were so prejudicial in the run-up to the case that they could well constitute

contempt of court themselves? Will he urge the Attorney-General judicially to consider that matter and pronounce upon it?

The Solicitor-General: The Divisional Court found that the court had made its intentions quite clear. Beyond that, I ought to say that the proceedings to which my hon. Friend has referred are not yet resolved, so we have to be a little careful.

NATIONALISED INDUSTRIES (INFORMATION)

Mr. Adley: On a point of order, Mr. Speaker. May I seek your guidance relating to the slightly unusual situation in which we find ourselves as Members as a result of the conflicting advice which we receive from three different nationalised industries, namely, British Airways, British Aerospace and Rolls-Royce?
The Secretary of State for Industry made a perfectly reasonable and balanced assessment of the position this afternoon, but some of the things that he said are in marked contrast to a Press release or information sent to a number of hon. Members by Rolls-Royce, entitled "The Way Forward", included in which were some comments which, being generous, one would describe as wishful thinking and not the sort of specific information which Members would expect to receive from a nationalised industry unless it were absolutely certain of its facts. Included were such phrases as
This would lead us to a very high penetration of the market
and
making a total United Kingdom content of 55 per cent.
According to the information that I have, both these statements are a matter of argument. Where does the House stand in relation to information sent to hon. Members from nationalised industries? Are we not entitled to expect more care in the provision of information on some of these controversial matters?

Mr. Speaker: I heard the hon. Gentleman out, but I think that he will realise that there is no point of order for me to settle regarding statements issued by nationalised industries.

BUSINESS OF THE HOUSE

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): With permission, Mr. Speaker, I should like to make a short Business Statement.
In addition to the business already announced for tomorrow, it is hoped that the House will agree to take the remaining stages of the Solomon Islands Bill [Lords.]

ZAIRE (BRITISH SUBJECTS)

The Minister of State, Foreign and Commonwealth Office (Mr. Edward Rowlands): I will, with permission, Mr. Speaker, make a statement on British citizens in Zaire.
My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs informed the House on 16th May about the situation of British citizens in Zaire.
I now have to tell the House with very deep regret that five British subjects must now be presumed to have been killed in the appalling atrocities which have taken place in Kolwezi in the past few days. An RAF officer, who was sent there yesterday as soon as the first information about British loss of life was received, has reported that he has firmly established the deaths of three of those concerned. We shall make every effort to confirm the position over the remaining two reported British victims as quickly as possible.
The remaining 19 United Kingdom citizens who were known to have been in Kolwezi are now safely accounted for. Some have already been evacuated to Europe and others are still in Zaire. The British Embassy at Kinshasa is doing everything it can to help. It has not, in the event, been necessary to use two British Army medical teams which were sent.
I am sure that the House will join with me in expressing deep sympathy to the families of those who have been so wantonly killed in these tragic events, as well as to all those of every nationality who have suffered in this terrible ordeal.

Mr. John Davies: First, may I associate the Opposition with the expression

of sympathy and regret which the Minister of State has uttered? We all feel simply horrified at the spectacle of what has happened in the past few days. May I now put three questions?
Can the Minister assure the House that every step is taken not only to look after the remaining British citizens in Shaba and the area concerned but to look after those who may be in the path of the retreating guerrillas as they go to their countries whence they came, perhaps through Zambia and into Angola, in order to protect British lives in that area?
Secondly, can the Minister give the House some reassurance about the position of the European Community and other European powers in this matter? Does he recognise that the great history of European relationships with Africa and the current position wherein so many European people are employed in that continent are a cause for particular concern among European Powers? What steps is the Minister taking to try to ensure that there is some permanent and positive European co-operation with a view to insuring against the development of these fearful emergencies and to an effort to create some stability in Africa?
Thirdly, there can at this stage, I know, be only a presumption that Cubans, East Germans or Soviet forces or others are involved in this set of atrocities, but is it not more and more clear that the presence of these people in Africa constitutes a permanent threat to peace? Is it not time now to raise the matter with the Security Council, pointing out that the failure to withdraw these forces, still in Africa now after years and simply set upon destroying the future of Africa, cannot be allowed to continue?

Mr. Rowlands: I can certainly give the right hon. Gentleman the first assurance for which he asks. We are in close touch with the Zambian authorities about the possibility of British citizens, including children, being involved in the path of the retreating forces. As for the question of European co-operation, I think that there has never been closer co-operation within Europe on African matters, at all levels. Last weekend we had the meeting of EEC Foreign Ministers which discussed in considerable detail all aspects relating to Africa.
I understand and appreciate the third point which the right hon. Gentleman makes, and in a recent speech my right hon. Friend raised the whole issue of Cuban and Soviet involvement. We have said previously, and we have repeated, that if we can gain the support of others, the matter can be taken to the Security Council, but we require such collective support to bring the matter to the Security Council effectively.

Mr. David Steel: I associate my right hon. Friend and hon. Friends and myself with the expressions of sympathy to the relatives of those who were killed in this tragic incident. May I press the Minister a little further on the first question raised by the right hon. Member for Knutsford (Mr. Davies), with reference to the missionaries and farmers, British citizens, in the north-west corner of Zambia? Is their safety assured should the rebel forces be crossing back through that region? Secondly, although I do not wish to go into the deep roots of this particular conflagration, since there seems to be no doubt that it started from Angola, will there at least be some protest by the British Government to the Government of Angola?
Thirdly, will the Minister, with his colleagues in Belgium and France, be reviewing the nature of this operation, since it appears that the lack of a news blackout gave forewarning of the operation, with tragic consequences?

Mr. Rowlands: On the first point, obviously, one cannot give an absolute assurance, but I assure the right hon. Gentleman that there are close consultations going on between our High Commission in Lusaka and the Zambian authorities on the possibilities which he has raised. On the second issue, I think that the Angolan Government are under no illusion about where we stand and where our partners stand on the role and function of the Cubans in Angola in this or any other episode outside their country.
As for reviewing the nature of the operation, it was in many respects an example of close co-operation among European partners, but, obviously, one learns from any particular incident or event.

Mr. Whitehead: Although, obviously, it is too early to go into the sequence of

these tragic events, has my hon. Friend the Minister seen the reports in today's Press that at least some of the killings seem to have been carried out before the insurrectionary group started on the widespread massacre and pillage which took place in Kolwezi? Will my hon. Friend make a protest to President Mobutu's Government to make absolutely clear that we hold that Government and all others on the African continent responsible for the safety of expatriates who are in their territory?

Mr. Rowlands: The safety of any people working or living within a Government's boundaries is the responsibility of the Government concerned. I cannot confirm the reports to which my hon. Friend refers, although we are in touch with Kinshasha about this now.

Mr. John Page: Will the hon. Gentleman refer more directly to the question he was asked by the leader of the Liberal Party and consider whether a direct reproof to Angola should be given for its part in this incident, particularly remembering the position on the Angola border in connection with SWAPO and the Namibia affair, all of which is interknit?

Mr. Rowlands: The Angolan Government can be in no doubt about our position in respect of activities carried on outside Angola by Cuban forces based in Angola. But we have no evidence of the direct participation of Cuban forces in the Shaba province.

Mr. Newens: Whilst I utterly deplore the appalling atrocities, may I ask my hon. Friend to investigate the reports now being circulated that the killings were apparently begun by soldiers of General Mobutu's Government army? In these circumstances, would it not be totally premature to attempt to pin every atrocity that takes place on the Africa continent on the presence of Cuban troops in Angola, bearing in mind that many other people have also had troops in Africa over the years, troops who have been responsible, particularly in the Congo, for many other atrocities long before the Cubans arrived?

Mr. Rowlands: We have no confirmation of the report to which my hon. Friend refers. But what is not premature is to say that considerable massacre


and acts of brutality were committed by the rebels in Shaba on the European and expatriate population in Kolwezi.

Mr. Rifkind: Do the Government yet have any information whether the objective of the rebel forces is to seek the secession of the Shaba province from the rest of Zaire or whether the intention is to try to topple the Zairian Government as a whole?

Mr. Rowlands: I do not think that it is possible on the basis of any evidence that we have to say what the particular objectives were, except the disruption and destruction of not only people but economic facilities and the economic infrastructure of the area concerned.

Mr. Grocott: Has my hon. Friend sought assurances from the French that their operation is restricted simply to securing the safety of citizens in Zaire and that there is no question of their involving themselves in any possible civil war in Zaire? Does my hon. Friend agree that we cannot possibly object to the troops of just one country involving themselves in Africa, and that our objection should be to any country—from East or West, Cuba, France or any other—involving itself in the internal affairs of Africa?

Mr. Rowlands: We do not have to seek assurances from the French Government. They have made a statement, with the Belgian Government, that their sole objective has been to help the evacuation of expatriates from the area concerned. Any sovereign Government are perfectly entitled to invite the support of someone from outside to assist them with any problems.

Mr. Blaker: If there has been Cuban involvement, at least in the preparation of the invasion, is not this incident another demonstration of the importance of the Western countries, including the United States and Britain, giving a demonstration to those countries in Africa which are well disposed towards us that we have some will to look after their and our interests?

Mr. Rowlands: I do not think that there is any question about that or about good will in all the discussions that we have, bilaterally and multilaterally, with African countries or Africa in general. We convey our support for a strong Organisation of African Unity, the principle

of territorial integrity of African States, and acceptance that, as in Shaba, one cannot and must not try to change the situation by force, the consequences of which we have seen only too clearly in the past two weeks.

Mr. Evelyn King: Is it not a fact that the invasion troops came from Angola, and as Angola is Cuban-dominated, will the Minister state unequivocally that this incident could not have happened without Cuban connivance? Will the hon. Gentleman make that perfectly clear?
Secondly, is it not a fact that we approach the situation that at least among the smaller independent African States there is constant danger from Cuban forces? Will the Foreign and Commonwealth Office take that on board and realise that independence among the smaller African States is now everywhere at risk?

Mr. Rowlands: As to the hon. Gentleman's first point, all that I have been able to say is that we cannot confirm or prove that there has been any direct Cuban involvement in Shaba. That does not mean that there was not Cuban involvement in the military training, advice or assistance given to any group in Angola that went into Shaba. That is quite clear.

Mr. Alan Clark: Is not there considerable evidence that the private recrimination, mutual jealousies and general incompetence of the French and the Belgians in this case show that snap reactions by the Community are singularly ineffective? Leisurely consultations are all very well, but does not the Minister agree that in a crisis British subjects are likely to be save only by British Service men?

Mr. Rowlands: But for the intervention there could have been a much larger death toll of expatriates in the Kolwezi area. The action taken was designed to prevent the tragedies that had already occurred in that town to expatriate citizens—Belgian, French, British or any other.

Several Hon. Members: rose—

Mr. Speaker: I shall call those hon. Members who have been rising to ask questions.

Mr. Hooson: Will the hon. Gentleman direct his mind to the third point put to


him by my right hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel): did not the absence of a news blackout make it much more difficult for the troops going in? Does not the evidence suggest that it materially affected the attitude of the insurgents, because they heard over the radio that paratroopers were coming in, and that affected their attitude towards the white population?

Mr. Rowlands: Clearly, before this incident, large numbers of people had already been attacked and killed in one way or another. Everybody realises the extreme difficulty in a modern society of the movement of people or the planning of such movements in total secrecy.

Mr. Biggs-Davison: Will the European discussions which the Minister mentioned be directed towards removing the delays and rivalries which appear to have affected the Kolwezi operation? As for Cuban and therefore Soviet involvement, when the Foreign Office has some information to give us, may we please be given it?

Mr. Rowlands: When we get any detailed or concrete information, it can of course be provided through the normal ways and means of obtaining information from the Foreign and Commonwealth Office and from Ministers.
I think that I have answered the hon. Gentleman's first point three or four times. There was very close co-operation in the operation. Although one may learn from the experience, I think that it has succeeded in saving many people who would otherwise have been killed.

Mr. Fairbairn: Does the Minister appreciate that had matters been in reverse and the same number of black people rather than white people had been killed, we should have had massive protests from our Government, the United Nations, the Organisation of African Unity, Amnesty International and so on? May we have an indication that the Government regard the action as purely racist? Secondly, will the hon. Gentleman tell us to what extent British aid to Angola may have assisted? Thirdly, to what extent does he take the view that the invasion, whether or not it was

successful, has successfully abolished the European presence which is essential to Zaire's economy?

Mr. Rowlands: Black and white have been killed in the atrocities of the past few days. There is no racist aspect to this. The brutalities of the invading group and the tragedies it caused are now, sadly, well known.
As to the hon. and learned Gentleman's other points, I think that he is off the beam. What we have been trying to do in conjunction with our European partners is to conduct successfully the evacuation of a significant group of expatriates who were working in the Shaba province. The hon. and learned Gentleman may be right—only time will tell—whether the effect on the economy of that province, which depended considerably on the presence of these people, with their technical expertise, will permanently damage the Zaire economy. These are matters that will have to be dealt in the months ahead.

Mr. Brotherton: Will the Minister tell us how many more such incidents there will have to be before the Government tell the Governments of such countries as Zambia, Angola and Mozambique that as long as those countries continue to harbour those who commit murder on the continent of Africa we shall not give them any more aid? Secondly, would the Minister of State not agree that this tragedy shows how it is now more than ever necessary for the Government to do all in their power to promote the internal settlement in Rhodesia?

Mr. Rowlands: The House should resent most bitterly the bracketing of the countries the hon. Gentleman has mentioned. The hon. Member has associated the Zambian Government with these issues when we know from the conversations that the Prime Minister had last week with President Kaunda that the Zambian authorities have done their utmost to help deal with the terrible problems and consequences of this incident.

Mr. Faulds: Since these tragic and ghastly incidents are likely to recur in other parts of Africa, largely because of the ex-colonial legacy, may I ask my hon. Friend to assure the House that if such incidents occur in a British ex-colonial territory, British forces will be


sent with as much dispatch and determination as the French forces were sent to Kolwezi.

Mr. Rowlands: That is a hypothetical question. It is the responsibility of every Government to try to ensure the safety of their citizens at home and abroad.

STATUTORY INSTRUMENTS, &c.

Mr. Maxwell-Hyslop: On a point of order, Mr. Speaker. Are you aware that the Church of England (Miscellaneous Provisions) Measure referred to in the next motion is not available in the Vote Office? Have you any discretion to decline to put the Question when the promoters of this measure have not troubled themselves to place it in the Vote Office so that it is available for hon. Members on the day on which it appears on the Order Paper? If you have such a discretion, I would respectfuly ask you to use it so that you discourage what is at the best a gross discourtesy to the House and an inconvenience to hon. Members.

Mr. Speaker: I am much obliged to the hon. Gentleman. However, I do not have such a discretion. The House instructs me that the matter must be decided forthwith.
By leave of the House I will put both motions—

Hon. Members: Object.

Mr. Speaker: Very well. I will put the Questions separately.

Motion made, and Question put.
That the Church of England (Miscellaneous Provisions) Measure he referred to a Standing Committee on Statutory Instruments, &amp;c.

Not less than 20 Members having risen in their places and signified their objection thereto, Mr. SPEAKER declared that the Noes had it, pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments &amp;c.).

Ordered,
That the Valuation Lists (Postponement) Order 1978 be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Foot.]

LUCAS AEROSPACE

Mr. Churchill: On a point of order, Mr. Speaker. I understand that in my absence, a few minutes ago, the hon. Member for Perry Barr (Mr. Rooker)—without observing the normal courtesies of the House of advising me that he intended to do so—made a personal attack on me. I am advised that he suggested that as a result of action that I had taken or as a result of matters that I had raised in this place or elsewhere—

Mr. Spriggs: On a point of order—

Mr. Speaker: Order. We must have one point of order at a time.

Mr. Churchill: —I had caused a contract to be lost for the workers and company of Lucas Aerospace. I further understand that the hon. Member did not specify what that contract was. Perhaps he would like to make that clear. I can only imagine that he is referring to a contract which would have provided for the improvement by high technologists in this country of the Kuznetsov NK144 engine, which is the engine that powers not only the Soviet supersonic Concordski but their supersonic nuclear strike bomber known as Backfire, which poses a grave threat to the people of this country and the NATO alliance as a whole. If I have played some part in quashing that deal I am delighted and proud to have done so.

Mr. Speaker: The hon. Member has used a point of order to answer a charge or a statement that has been made by an hon. Member. There is no point of order for me.

Mr. Skinner: What are you going to do?

Mr. Speaker: I am going to ask the Clerk to read the Orders of the Day.

Orders of the Day — SUPPLY

[16TH ALLOTTED DAY]—considered.

Orders of the Day — ARMED FORCES (PAY)

3.57 p.m.

Sir Ian Gilmour: I beg to move,
That the salary of the Secretary of State for Defence should be reduced by half.
The bleak background to this debate is the dangerous drain of men from the Armed Services. I very much hope that the Secretary of State will be able to give us some more encouraging news about the exodus than anything which I or anyone else have been able to glean from elsewhere. In any case, I assume that the right hon. Gentleman will not attempt to deny that what has happened is desperately serious.
The immediate cause of the motion and the debate is the Government's pay award to the Armed Services and its consequences. I will return to the Secretary of State before long, but it is only fair to him to point out that the malaise in the forces and the disastrous state of our defences date from well before his arrival at the Ministry of Defence. They go back four years. It is important to realise that the present crisis is not just a matter of pay. It goes far deeper than that. It concerns the vast cuts which the Government have made in defence. It concerns the fundamental attitude of the Labour Party to the defence of this country and to the British Armed Services. It concerns the way in which the Labour Government have, for the past four years, treated defence and the Armed Services.
Because of the Government's treatment of the Services and because of the growing disillusionment that they have suffered, the Services have begun to lose confidence in the system. As part of a general shift to the Ieft when in opposition the Labour Party decided to launch an unprovoked attack upon our defences and our Armed Forces. When Labour came into power in 1974 it proceeded to carry out its obsessive aggression, with disastrous consequences. The Labour Government have cut, or planned to cut, £10 billion off our defences. Naturally, they have pretended that they were not


doing enormous damage. The cover story was that our contribution to NATO was not being cut—that it was the so-called tail and not the so-called teeth that were being trimmed.
But the Armed Services were not fooled. They knew perfectly well what was going on. Dr. Luns, the secretary-general of NATO, the all-party defence committee of this House, the Conservative Opposition and the Press have all stripped away the layers of deceit and have revealed the dangerous truth. Those cuts were, of course, very damaging to Service morale.
The Services have seen time and again that they and Britain's defences come right at the bottom of Labour's list of priorities. In consequence, there is a shortage of virtually everything—men, modern equipment, spares, training, transport. A classic example of this is that at a time when the Russian superiority in tanks is nearly three to one, 56 of our Chieftain tanks in BAOR have had to be put in mothballs because of the shortage of men. The Secretary of State could hardly want a more apt or damaging comment on his stewardship.
We on this side of the House are the first to agree that Labour Secretaries of State for Defence have many difficulties—and nearly all those difficulties sit below the Gangway opposite. [HON. MEMBERS: "Oh."] There are certainly two exceptions there, as I readily concede. In one sense, of course, the right hon. Gentleman is helped by the Tribune Group, just as his Labour predecessors were. He can always say to the forces "You may think that what I am doing is terrible, but if you look at the policy of my Left wing you will realise that it could be very much worse." That may help the right hon. Gentleman, as it did his predecessor, but it does not help the country.
The pronouncements and attitude of the Left-wing do nothing to improve Service morale. As far as I can see, the Tribune Group is prepared to march anywhere in favour of any cause except the defence of this country. Its members are never happier than when they are trying to dismantle the defences of the country. The Left consistently welcomes cuts in defence expenditure, even though those cuts make their constituents unemployed.

Mr. Eric S. Heffer: Some of my hon. Friends are saying "Do

not bother to interrupt, he is not worth it". But it is an important matter when a right hon. Gentleman in this House has the audacity to suggest that Members on this side of the House with whom he does not agree politically are not concerned with the defence of their own country. If he will check up on the Army, RAF and Royal Navy records of Members in the Tribune Group he will discover that a considerable number of us spent many years in the Armed Forces and passionately believe in the defence of our country, while at the same time accepting Labour's view that we ought not to be spending more on defence than our NATO allies, which is precisely the policy that we have adopted—nothing more and nothing less. I ask the right hon. Gentleman not to go on making statements of that kind, which are a deliberate falsification about the attitude of hon. Members on this side of the House.

Sir I. Gilmour: That was an extremely long-winded intervention which had very little to do with what I was saying. I am not disputing the hon. Gentleman's war record, which I am sure was very good. My comments were purely directed towards the political attitudes to defence taken by the Tribune Group. I shall now expand on those comments, and perhaps I can carry the hon. Gentleman with me.
The Government's defence policy has already cost 150,000 jobs, and it will be over 200,000 before long. Why is it that the Tribune Group is so anxious to disarm this country while the Soviet Union devotes more and more of its resources to the production of offensive weapons? Perhaps the hon. Gentleman will answer that. Presumably Members of the Tribune Group are fully aware of Russia's vast rearmament programme.
The Tribune Group even admits to being hostile to NATO and wants to end Britain's commitment to the alliance. Since NATO has undoubtedly preserved the freedom and integrity of Western Europe for 30 years, that is surely an odd attitude of anyone who is in favour of freedom and of a free Western Europe. Of course, it is perfectly possible to be very Left wing and not he opposed to Europe. That is the attitude of the Italian Communist Party. But perhaps the Tribune Group regards the Italian Communist Party as not being


sufficiently Left-wing and as lacking in Socialist zeal and Socialist purpose.

Mr. Heffer: Will the right hon. Gentleman now read chapter and verse of where the Tribune Group has actually said that Britain should withdraw from NATO? If he has such chapter and verse, it is something that has escaped me. There are one or two of my hon. Friends who, honestly and openly in the House, have said that they are not in favour of Britain being in NATO, but I do not remember a particular statement by the Tribune Group where the group as such has said so.

Sir I. Gilmour: I am happy to jog the hon. Member's memory. I refer to "Statement on Defence and Foreign Policy", subtitled "A Critique of Policy for 1976", by the Tribune Group and embargoed for 11 a.m. Friday, 9th July. It says:
In the long run, however, it is our view that British defence expenditure should be related to the pursuit of a socialist foreign policy, and there is a contradiction between many of the aims outlined in the document
that is, Labour's Programme for Britain 1976—
and the fundamental commitment, accepted by all British Governments for the past quarter of a century, to NATO and other military alliances. These are designed to achieve security and stability for existing regimes which are situated within the western sphere of influence. This end is in many cases incompatible with support for movements seeking to achieve radical social change.
By that I take it that it means Communist revolution. It goes on:
in the absence of positive steps towards mutual and concurrent phasing out of NATO we consider that Britain should progressively reduce her commitment to NATO.
The adoption of this policy would represent a decisive shift in the direction of non-alignment in international affairs.

Mr. Heffer: Will the right hon. Gentleman now explain to the House—

Mr. Stephen Hastings: On a point of order, Mr. Speaker. How many speeches do we have to listen to from the hon. Member for Liverpool, Walton (Mr. Heffer)?

Mr. Speaker: Order. The right hon. Member for Chesham and Amersham (Sir I. Gilmour) courteously gave way to the

hon. Member for Liverpool, Walton (Mr. Heffer).

Mr. Heffer: Will the right hon. Gentleman explain where in the document it is said that we ought to come out of NATO? What the document says is perfectly clear, and it does not say that.

Sir I. Gilmour: I said in my original remarks that the Tribune Group was hostile to NATO. I then pointed out that it had said that we should substantially reduce our commitment to NATO. Obviously, the second statement proves the first. If the hon. Gentleman disagrees with that policy, he should get together with his friends in the Tribune Group and alter it, but he should not complain about my enunciating it.
At best, the policy of the Tribune Group can charitably be described as being neutral against the West, or maybe it is even simpler than that. Since, obviously, members of the Tribune Group do not see Russia and the Warsaw Pact as a threat, perhaps they see them as a promise. Such an interpretation is supported by "Labour's Programme for Britain 1976", which was strongly opposed by the Left wing and which called for further massive cuts in Britain's defence expenditure. Although the then Secretary of State for Defence said that at best such cuts would mean a policy of neutrality and at worst surrender and would cost another 300,000 jobs, the Left wing and, indeed, the entire Labour Party conference voted for it by about 98 to one.
So our Armed Forces are well aware that there is a substantial body of opinion in the Labour Party which is fundamentally opposed to what they are doing and what they stand for, and that is not likely to raise their morale. Nevertheless, the antics of the Left wing and the Labour Party cannot absolve the right hon. Gentleman and the Government generally from responsibility for national security, and it is the systematic neglect of the Armed Forces by the Government which has made the present crisis infinitely worse than it would otherwise have been.
Napoleon once said:
The morale is to the material as three is to one.
The Labour Government do not worry about such niceties; they clobber both—morale by their treatment of the Armed


Forces over pay and conditions and material by depriving them of sufficient equipment. Had the Services been treated properly in other ways they would still, rightly, have complained about their pay and conditions, but their morale would have been much higher than it is now, and the number leaving in disgust would have been very much lower.
In censuring the Secretary of State it is no part of my case to claim that at the very last moment the right hon. Gentleman did not do his best to try to get a square deal for the Services. I am sure that at that time he did, and that he was supported by those Ministers in the Cabinet, who are quite interested in the defence of this country. I think that there are three or four of them. Neverthless, the indictment against the Secretary of State is a heavy one.
First, he was, for a very long time, inexcusably complacent about the matter. Secondly, he has broken a pledge that he gave to the forces and to the House. Thirdly, he totally failed to get a square deal for the forces. Therefore, the only proper course for him was to have resigned.
After all, this is not something that has suddenly emerged out of the blue. The Secretary of State had plenty of time to understand its seriousness, but he did not do so. That was shown by his extraordinary action in joining the picket line at Grunwick. If he had realised the extent of the resentment in the forces against last year's Irishman's rise, he would not have been so insensitive as to show himself more active in support of strikers in his own union than he was on behalf of non-strikers in the Armed Services, whom he is supposed to look after.
This time last year we had a debate on forces' pay. The Opposition have been extremely forbearing on this matter, perhaps too much so. We did not force a Division, but we tried to alert the Government to the gravity of the situation. Unfortunately, the Secretary of State was unalertable.
I warned the Secretary of State then of the steep rise in the numbers of those wishing to leave the forces. What was his answer? He talked about the satisfactory level of recruiting and re-engagement. I asked him how he proposed to restore the

morale of the forces and remedy justified grievances. He gave no answer to that.
Even after that debate the Secretary of State did nothing. For some reason he thought that the issue would go to sleep. He did nothing despite the plain words at the end of the Armed Forces Pay Review Body's report for 1977 which, after referring to the shortfall in forces' pay, said:
We have drawn attention to the fact that the current measures prevent any steps from being taken to reduce that shortfall. We see this as the most important single issue which will face us in the coming year … We attach particular importance to the need for a measure of flexibility in the period after 1st August 1977 in a form that is directly relevant to the Armed Forces pay system.
The Secretary of State still did nothing, despite what he told the forces when the Irishman's rise was announced. He said then:
The rigid nature of the first two rounds of the present incomes policy has produced distortions in some pay structures in the professions, industry and other occupations. The Government hope that it will be possible to put these right under future stages of the policy, and I will ensure that the needs of the Armed Forces are fully taken into account.
That is not exactly a ringing declaration, but it is surely one which committed the Secretary of State at least to some activity.
In fact, the Government's pay policy did nothing to meet the Review Body's call for a measure of flexibility. Far from the needs of the Armed Forces being taken into account, as the Secretary of State promised, the Government's pay policy, in allowing productivity deals, discriminated against the Services, which have no possibility of making such deals.
The Secretary of State still did nothing, despite a debate initiated by my right hon. Friend the Member for Crosby (Mr. Page), despite many speeches and Questions from my hon. Friends and myself, and despite many articles in the Press. The Secretary of State remained in his habitual condition of complacent confusion, or perhaps it is confused cornplacency—either will do. While he was doing nothing whatever, the Secretary of State knew full well that the position was deteriorating fast. He must have known that at least since the firemen's strike last year. He must have known that what previously had been grave was now disastrous. Yet by his remarks on pay during that strike he made matters even worse.
Last January my hon. Friend the Member for Richmond, Yorks (Sir T. Kitson) wrote to the Secretary of State to tell him of the disturbing situation at Catterick. He gave examples of the financial strains on married soldiers, and said that it was essential that the Secretary of State should go there. He did not go there and he did not even bother to send the Under-Secretary—not that that would have done any good. However, surely one of them should have gone.
The Secretary of State has known at least for the last six months that morale has been growing increasingly brittle and that an alarming number of highly trained and skilled officers and men are intent on leaving the Forces. I asked him a Question in February when the Answer showed that the number of Army captains who had resigned had gone up between 1976 and 1977 by more than 60 per cent. There is plenty of other information to the same effect that has been elicited by questions from my right hon. Friends the Members for Stretford (Mr. Churchill), Woking (Mr. Onslow), Chertsey and Walton (Mr. Pattie), Christchurch and Lymington (Mr. Adley), Tynemouth (Mr. Trotter), Workington (Mr. Page) and others.

Mr. John Cronin: The right hon. Gentleman has made the point that the Secretary of State should have done something during the last six months. Are we to understand that he should have done something without waiting for the report from the Armed Forces Pay Review Body?

Sir I. Gilmour: The Secretary of State should have told the Armed Forces Pay Review Body that it could have leave to depart from the Government's pay policy. In spite of what the Prime Minister, the Secretary of State and the Minister of State said about the Review Body being independent, in fact it is not independent of the Government's pay policy. It was not independent under us and it is not independent under them. They knew that perfectly well. Therefore my contention is that, in view of the gravity of the situation, the Government should have given directions to the Review Body telling it that it was not bound by the Government's

pay policy. They should have done that before it reported.
The situation was deteriorating. Even in the debate on the Defence White Paper two months ago, the Secretary of State remained complacent. I warned him then of the serious exodus from the Services of skilled and experienced officers and men, and so did all my hon. Friends. But nothing happened.
That brings me to the report of the Review Body and the period when the right hon. Gentleman at last abandoned his complacency—far too late—and tried to get a square deal for the forces. Unfortunately for them, the complacency which was abandoned by the Secretary of State was taken up immediately by the Prime Minister, who then added to it ignorance and petulance. That is not quite the image of him that the Government propaganda machine is currently trying to project.
The Press Association gave figures from the Ministry of Defence showing the alarming stampede out of the forces by Service men, and because The Times published the Prime Minister's failure to see the Chiefs of Staff, the Prime Minister smeared the Ministry of Defence and accused it of mischief making, and as a result elaborate investigations took place.
Let us have a brief look at the record of the man who has been making such a fuss about leaks and alleged mischief making. For that we can scarcely do better than turn to the last volume of the Crossman diaries. Here it is said:
Jim can be two-faced, but his fault is perhaps that he does far too much talking for a really successful Machiavellian politician, round the smoking room, round the tea room, dashing away with all the boys. He is a tremendous chatterer with the Press … and he is a compulsive a communicator with the Press as I am, and a great deal more leaky.
In 1969 of course the Prime Minister was leaking in his own interest and not in the public interest.
In contrast, the Press Association's publication of the figures of the exodus of officers and experienced and skilled NCOs from the Services was very much in the public interest. Moreover, the basic fact of the exodus was, as I have shown, already public knowledge. Only the most furtive politician could see anything sinister in the British people being told the truth about this vital matter. Indeed,


when I first read the report on the tapes I assumed that the Secretary of State himself had been responsible for the timely release of the figures.
We now know that he was not intelligent enough to do that and that the information came from the Chiefs of Staff. Because of the Prime Minister's pique, the Secretary of State was ordered, absurdly, to rebuke them and to say that they should have sought the authority of Ministers in this matter.
This raises a key and interesting question. If the Chiefs of Staff had sought the authority of the Secretary of State, would he have given it? Or is he as opposed as the Prime Minister to the truth being told?
In an answer to me a week ago the Secretary of State was forced to admit that there was no information in that report which carried even the lowest security classification. Nor did the report over-estimate the gravity of the exodus, in spite of what the Prime Minister said in the House. In a parliamentary Answer the Minister of State fully confirmed what had been said. The Secretary of State was thus reduced to accusing the Chiefs of Staff of being selective. That was merely a transparent attempt to save the Prime Minister's face. In this context the word "selective" should be translated as meaning inconvenient to the Prime Minister and the Government.
Would the Secretary of State have authorised the issue of the figures in the report? If not, why not? If "Yes" what was all the fuss about? The answer is that the fuss was caused by the Prime Minister losing his head at Question Time and lashing out, quite wrongly, at the Ministry of Defence. In any case, the right hon. Gentleman's attempted rebuke to the Chiefs of Staff was completely unjustified. I have no doubt that he is now thoroughly ashamed of having given it. The right hon. Gentleman should have refused to do the Prime Minister's dirty work for him.
The Prime Minister was even more piqued by the publication in The Times of his refusal to see the Chiefs of Staff at the proper time. Evidently he believed that that refusal should remain an official secret. Some of us might wish that the Prime Minister's bad manners had been reserved for the visit of Mr. Ponomaryov.

At any rate, the Chiefs of Staff are in good company. The only other person the Prime Minister is on record as having refused to see at the proper time is the Archbishop of Canterbury.
To summarise, the Chiefs of Staff were prevented from telling the Prime Minister the truth about the crisis in the Armed Forces before the Cabinet's decision on pay was made. Instead, they were rebuked by the Prime Minister's sidekick for telling the truth about the crisis to the British people. We may all congratulate the Chiefs of Staff on loyally accepting such outrageous treatment. Indeed, that treatment well symbolises the Labour Government's neglect of the Armed Forces during the past four years.
The distinguishing mark of the pay award is that for the next year it leaves the pay of the Armed Forces just as far behind what it should be as it has been for the past 12 months. It moves them not one inch toward comparability. Plainly that is not a square deal. Let us test the right hon. Gentleman's pledge to the Forces a year ago against what he has now accepted for them. He said:
I will ensure that the needs of the Armed Forces are taken fully into account.
If when he made that pledge a year ago he had told Service men and their wives that for the whole of the following two years they would be relatively just as badly off as they were then, does he think that one Service man or his wife would have thought that he had fully safeguarded his or her interests? No one would have thought that. Everyone would have thought that he had fully sacrificed the interests of Service men. In fact, that is what he has done and that is what has happened.
The harsh and undoubted truth is that a great many Service men are living in poverty and will continue to do so after this award. Much of the unrest in the Services during the past year or so has been caused not merely because their pay has fallen behind others but because they have been suffering hardship.
In view of the question asked by the hon. and learned Member for Montgomery (Mr. Hooson), and in view of the Prime Minister's answer, the House may find it instructive to compare what happened under the Conservative Government with what has happened under the


Labour Government. I accept responsibility for the period down to and including the 1974 Pay Review Body report. However, the great inflation unscrupulously set off by the Chancellor and the so-called social contract after that time are obviously the responsibility of the Labour Government. That is demonstrable.
I rely largely on the figures provided last week thoughtfully by the Minister of State to my hon. Friend the Member for Stretford. The figures indicate that under the Tory Government Armed Forces' pay fell 7·6 per cent. behind average earnings. That was almost entirely due to the jump in outside earnings between the 1972 Review Body's report and the start of the incomes policy in November. However, phase 3 was designed to help the Armed Forces through its provisions for unsocial hours.
Moreover, those in the Armed Forces, like those in other sectors, were getting better off under the Tory Government. Under our administration real disposable income rose by 4 per cent. a year. Finally, morale was very high throughout our period of office. Defence Ministers could visit, quite happily, all defence establishments. That is not always the position now.
In contrast, during the administration of the Labour Government the Armed Forces have fallen behind by another 13·3 per cent. and are now 22 per cent. behind average earnings. The longer such disparities persist, obviously the more damaging and resented they are. Besides, under Labour, as opposed to the Tories, the forces, like everybody else, have not been getting better off. Far from there having been a considerable increase in real disposable income, there has, been no increase at all since 1974. The Armed Forces have suffered a decline. Last November, in answer to my hon. Friend the Member for Woking, the Government admitted that the real value of the forces' basic pay in 1977 was between 18 per cent. and 8 per cent. lower than it was in 1974. Therefore, under Labour the forces have lost both relatively and absolutely and morale has suffered predictably and accordingly.
If, therefore, the Liberal Party was hoping to use what happened under the Conservative

Government as an excuse for voting tonight in accordance with the Lib-Lab pact, I am afraid that it will have to try to dredge up another reason.

Mr. Emlyn Hooson: The case can be made on the right hon. Gentleman's own figures. In 1972 there was parity, but there was a loss of about 7·4 per cent. in about 15 months under the Conservatives.

Sir I. Gilmour: But even to the Liberal mind there is quite a difference between 7·6 per cent. and 22 per cent. Further, those in the forces were getting better off under the Conservative Government whereas they have been getting worse off under the Labour Government. I understand that the hon. and learned Gentleman may not pay much attention to these matters. He is not bound by the rationale, but surely the figures make it clear that he does not have a case.

The Secretary of State for Defence (Mr. Frederick Mulley): I hope that the right hon. Gentleman will recall that it took a 29 per cent. increase for the Labour Government to restore comparability in 1975.

Sir I. Gilmour: On the Minister of State's figures, that increase did not have that effect. Average earnings increased by 27 per cent. in the same year. Therefore, comparability was restored for about three weeks at the most. In 1975 those in the Armed Forces received a 29·5 per cent. pay increase while average earnings rose by 27·5 per cent. Those figures do not help the Secretary of State.
The forces, alas, will continue to suffer hardship, as is conclusively proved by the figures given by the Secretary of State in answer to my hon. Friend the Member for Norfolk, North (Mr. Howell). The most conspicuous example is the private IV (scale A) who is married with two children, who will be 1·8 per cent. better off. I concede that luckily there are very few in that category. All the same, there are many others who fare almost as badly. For example, a corporal 1 (band 2, scale C) with four children is only 5·9 per cent. better off.
A deputation of wives from RAF Waddington came to see me last week. The wives in that area feel so strongly about the pay award that they paid the


railway fares to London of the deputation. They gave me figures, which showed that a senior aircraftsman (scale B, band 1) with two children is less than £2 a week better off and now ends up with £43·47 a week. That is about £5 more than he would have if he were unemployed and living on supplementary benefit.
A LAC (scale B, band 1) with two children is even worse off. He gets only £1·58 a week more than before. One wife reckoned that her husband, a very skilled man with many years' service, who, like many Service men, works extremely long hours, gets about 50p an hour, about half the going rate of an office cleaner. I was told of people on the station who pretend to be separated so that the wife can go back and get a council house and live on supplementary benefit. One girl goes back with her husband to stay with her parents in Lincoln for the last week of every month as they cannot afford to live by themselves for the whole month. Probably the majority of families at Waddington are living on handouts from their parents.
That sort of thing is happening throughout the Armed Services. That is the position in which they have been for some time, and that is the situation in which the right hon. Gentleman has ordained they should remain for another 12 months. It is no wonder that so many Service men are leaving. Equally, it is no wonder that so many are fed up.

Mrs. Winifred Ewing: In view of the right hon. Gentleman's recent remarks, will he explain the nature of the Conservative proposal? Would it meet right away the whole of the 32 per cent. that on average the forces have fallen behind?

Sir I. Gilmour: I shall come to that in in about 30 seconds or one minute.
The local overseas allowance in Germany is now about 40 per cent. of a Service man's take-home pay. If the cut that the Treasury wanted last year was made this autumn, the 13 per cent. pay award would be wiped out, with possibly catastrophic effects. There is great worry about that, and what the Government spokesman said in another place on Thursday did nothing whatever to allay that worry. I hope that the Secretary of State will give an unequivocal assurance

today that there will be no reduction in the LOA this year.
The Government have said that comparability will be achieved, but only in the two years after 1978 and by the next Government. They have not a shadow of excuse for not starting the process this year.
The Review Body clearly would have liked comparability to be achieved this year and in strict justice that is what should have happened. But it would have been reasonable to restore comparability in two years. Those two years should have been this year and next, not 1979 and 1980. A post-dated cheque is usually a sign either of insolvency or dishonesty. In this case, it is a sign of political cowardice and of indifference to the interests of the Services.
Because the Secretary of State has failed to achieve any step towards comparability this year, and because he has left Service men and their wives in such penury, he has failed in his duty. It was his responsibility to look after the Services. When he was unable to persuade his colleagues to give them a square deal he should have resigned. He should have left it to his successor to defend what he knows is not defensible.
The case for a large move towards comparability this year would have been overwhelming, even if it had depended just on the money that the Services have lost during the last three years or on the hardships they have suffered. As The Guardian said, the award
does nothing to compensate them for the injustice they suffered under phases one and two.
The case does not depend on those things alone. An even more crucial reason for a move towards comparability now was the imperative need to reverse the present stampede out of the forces. I hope that the stampede will now slow to a trot or, better still, cease altogether. Unfortunately, there are few signs of that. What was needed was to reverse the stampede. This inadequate down payment and heavily post-dated cheque will certainly not do that. The Government have taken a quite unjustifiable risk over the nation's security and over the morale of the Services.
My right hon. Friend the Leader of the Opposition has said that we shall restore


comparability more quickly. I have said that it should have been restored this year and next year. The Government have failed the forces this year. I give this pledge to the Armed Forces: the Conservative Government will restore full comparability next year and we shall never let this sort of thing happen again.
Apart from anything else, the Government's shoddy behaviour has been economically foolish. According to the Review Body's report it now costs £1 million to train a jet pilot. The training of other skilled men is also extremely expensive. Yet, through their neglect of the forces, the Government drive hundreds of skilled men out of the Services and they will now have to pay enormous sums to train their replacements—if they can get them.
On all grounds the Government and the Secretary of State stand condemned. By their folly and neglect they have jeopardised the security of the country. They have battered the morale of the Services. They have acted with political cowardice, economic folly and neglect of the national security.
The Labour Government have given the Services the worst four years that they have suffered in modern times. Service men's wives have shown by their voices what they think of the treatment that they have received. Service men have shown what they think by voting with their feet. Not only are the Government at fault over pay, they are guilty right across the entire field of defence. Wherever one looks they have done damage.
They have disarmed the country unilaterally and they have put our forces into disarray. They have done all this, not in a time of peace and security, but at a time when the Russians have been growing ever stronger and the dangers to the West have been steadily and manifestly increasing. Even allowing for the Government's dreadful performance elsewhere, what they have done and failed to do in defence will prove to be the blackest part of their black record.
Of course the Prime Minister and the whole Labour Government are guilty and must bear the blame. But the Secretary of State bears the immediate responsibility. That is why we have censured him and why I ask the House to support the motion.

4.34 p.m.

The Secretary of State for Defence (Mr. Frederick Mulley): I am grateful to the right hon. Member for Chesham and Amersham (Sir I. Gilmour) and the Opposition for giving us an opportunity to discuss the pay and conditions of the Armed Forces. I share the Opposition's opinion that this is an important matter. The right hon. Gentleman's speech clearly indicates that there are still many misunderstandings to be cleared up.
I am sure that it will come as no surprise to the House that I cannot recommend the motion. The House should note that it is an extremely notable motion because it represents the first precise proposal of the Opposition to cut public expenditure that I have noticed. There are plenty of general declarations about cutting public expenditure but they never relate to a particular case. I found the right hon. Gentleman's speech a little in contrast to what the right hon. and learned Member for Surrey, East (Sir G. Howe) said on television after the Budget. He said that of course we want higher pensions, better schools, better hospitals, stronger defence forces but we have to earn the money to pay for them first before the Government can spend it.
Although the right hon. Member for Chesham and Amersham was not precise, he talked vaguely about restoring £10 billion in defence expenditure. It is important to know this background to our consideration of defence expenditure.
The right hon. Gentleman was right to draw the attention of the House and the public to the number of hard cases in the Armed Forces, particularly among those with large families. But the Opposition took a different approach to the question of taxation when that was before the House. Those on the lowest levels of income did not attract the Opposition's attention. It is fair to say that the Opposition have been concerned to squeeze the last drop of political advantage out of the situation in the Armed Forces. They have been doing that thoughout the last year.
Against the constant reiteration of every complaint that they can lay their hands on, it was a matter of satisfaction to me—although I am not in any sense cornplacent—that the engagement figures for 1977 in the Royal Navy and the RAF


were a little better than in 1976. The figures for the Army were about the same.
At the beginning of his book "Inside Right" the right hon. Member for Chesham and Amersham talks about the virtue of moderation and prudence, just as he began his speech today. But he would do better to show an example rather than to rely on precepts.
Perhaps we should not expect too much because in "Inside Right" he jostles his hon. Friend the Member for Stretford (Mr. Churchill) on the Right wing so much that they take the ball out of play between them without help from anybody else. They probably receive the accolade of the Leader of the Opposition because she has a favourite player who is not on the pitch.

Mr. Heffer: Worse than Jordan.

Mr. Mulley: Using football terms for political activity is dangerous. Reading that the hon. Member for Brent, North (Dr. Boyson), who speaks on education matters, describes himself as a centre forward I wonder whether it has any relevance to political philosophy.

Mr. Cranley Onslow: I wish that the Secretary of State would drop that tired metaphor. If he sets much store by precision and facts why has he no means of knowing, and appears not to care to know, how many science graduates have left the forces in each of the last four years? How many skilled men have left? Why does he not take the trouble to find out these facts before he comes to the House?

Mr. Mulley: A vast amount of information has been given. I cannot give a precise number. The hon. Gentleman has asked a number of questions and he has been given answers. If he was so curious, why did he not put down that Question along with the others?

Mr. Onslow: I have in my pocket the very Question. I was told in reply that this information was not readily available and could not be provided "without disproportionate effort". We want some proportionate effort from the little man.

Mr. Mulley: If hon. Members cease to put down at two days' notice Questions seeking a great deal of information

we should be able to do a great deal more.
There may be differences of policy, but I do not think there is any difference between us as to the importance of the work of the Armed Forces. The Government have a good record in what they have been able to do for the terms of service and pay of the Services. The right hon. Member for Chesham and Amersham was referring to the unsocial hours provision of 1973–74. Under the Conservative Government's policy it was permissible to make a special payment on this score. But it was the Labour Government who, immediately upon taking office, brought in a special 50p-a-day payment for those in Northern Ireland.

Sir Ian Gilmour: That was recommended by the Armed Forces Pay Review Body.

Mr. Mulley: That was recommended in May and the Government took office at the beginning of March. In 1975 we restored comparability. Last year, as part of their campaign, the Opposition attacked the Government because we were not going to do the right thing about gratuities for people on short-term commissions. The actual terms were very fair and favourable. Last May there was proper concern about conditions for families in Northern Ireland. That was met by putting resident forces, as well as the men on four-month tours, on field conditions.
This has had some consequences for the Ulster Defence Regiment. I have had representations that it may be slipping behind. We have looked into this matter, and in one or two respects we can certainly go some way towards restoring the ratio between the pay of the Regular Army and that of the UDR. Certainly, since hon. Members will want to raise this matter, I can say now that we shall want to consider it very sympathetically. I have been concerned, as a result of what I was able to do last year for the Regular Army in Northern Ireland, that the relativity between it an the UDR has been eroded.
In last year's Finance Bill special exemption was made for members of the Armed Forces so that they would not be taxed on their leave warrants or their


travel to work. This point had the support of the Liberal Party, which has taken a constructive interest in Service matters. In contrast to the attitude of the Opposition, the Liberals have not wanted to make political capital out of the situation but have made proposals that would help Service men. This is a different story from the alarm and despondency that day in, day out the Conservatives have been preaching inside and outside Parliament which by itself is bound to have damaged the morale of the forces.
What worries me is that I am not at all sure what the Conservatives want in terms of pay. I am not sure that they know either. It seems that all they are after is votes. In the last two years the maximum award consistent with pay policy has been implemented, and so have the recommendations of the Armed Forces Pay Review Body. This year in particular the Government have fully recognised the unique value of the Armed Forces and their special tasks and responsibilities by giving them an award which averages a good deal more than other groups, particularly those in the public sector, are receiving.

Rear-Admiral Morgan Giles: The right hon. Gentleman asks what we want. I can tell him in one word—comparability, as the forces were promised.

Mr. Mulley: This raises a very important question. Does the Opposition believe that pay policy should be totally abandoned or that it should apply to everyone but the Armed Services? Certainly that was not their view in respect of their pay policy. In the wider context, it is about time that we knew whether they were proposing to have some form of guidelines on pay, should the dire con sequence hit the country of their becoming responsible for our nation's affairs.

Mr. Hooson: Is it not correct that under the last Conservative Government's pay policy there were no exceptions for the Armed Forces or anyone else? Are the Conservatives now suggesting that there should be exceptions to pay policy?

Mr. Mulley: To the best of my knowledge that is true. Under their policy there was a possible exception for unsocial hours, but they sought not to exercise it on behalf of the Armed Forces.

Sir Ian Gilmour: Under the Conservative Government there was a statutory policy which the Liberal Party then supported. That is very different from a non-statutory policy. The Chancellor of the Exchequer has said that there would be exceptions under this Government's policy. These have been applied to people such as the Ford workers and others with industrial muscle. Secondly, irrespective of the sort of incomes policy in force, it is common ground between the two parties that the Armed Forces will get more next year. Even on the Prime Minister's view that is so. The right hon. Gentleman is waffling on irrelevantly, because the Armed Forces will get more over the odds next year anyway.

Mr. Mulley: The Armed Forces are getting more over the odds, as the right hon. Gentleman puts it, this year. The going rate in the public sector is 10 per cent.

Mr. Norman Tebbit: Will the Secretary of State repeat what he said? I understand him to say that the going rate in the public sector is 10 per cent. Is that the Government's policy? I thought that there was a 10 per cent. limit, except in the Prime Minister's constituency, where it is 12 per cent. for Ford.

Mr. Mulley: I should have known better than to give way to the hon. Member for Chingford (Mr. Tebbit). It is news to me that the public services embrace a Ford manufacturing concern. I said that in the public services 10 per cent. was the rate.
There is vast criticism of the Armed Forces Pay Review Body. We obviously would look at alternatives, but it is only right that we should pay our tribute to that body for the immense amount of work that it does. It does not have an easy task, and is unremunerated. We are hearing a different story today from our last debate when there was severe criticism of that body and charges that it did not have an independent status. Not only does it compare pay in the forces with pay in civilian jobs of a similar kind; it also takes account of overtime, pension rights, and other non-wage benefits in the comparable occupations. It receives a mass of evidence, directly from senior officials and officers in the Ministry


of Defence, and it visits the forces and discusses with Service men and thir wives pay and related matters.
With this information the review body is able to construct the appropriate levels of earnings for the Services which reflect the rank, trade skills, period of service, and so on. The X factor, generally 10 per cent. for men, is added to these levels of earnings in recognition of the unique features of Service life, including a requirement to work long and often unsocial hours, and to reflect the balance of advantage and disadvantage of Service over civilian life.

Mrs. Winifred Ewing: Does the right hon. Member consider that the mushroom growth of the forces wives' associations, including a very strong one in my constituency, is an expression of a real sense of growing hardship under all the headings that he has given? There is great fear that any increase will be swept away immediately by rent increases. Is the right hon. Member aware of the tremendous demand in the North-East of Scotland for a cost of living allowance because the cost of living there is even higher than that in the London area?

Mr. Mulley: I can give the hon. Lady the assurance that there will be no increases in married quarter rents in the coming year. As to the question of the cost of living, there are no special cost of living allowances for Service men serving in the United Kingdom.
As I was saying, the Review Body makes recommendations about not only pay but also accommodation and food charges. These also are based on a comparison with civilian life.
As I have made absolutely clear, the Review Body, in making its assessments and inquiries, is supported by a staff that is totally independent of the Government. Obviously, however, it takes into account any incomes policy which may be in operation at the time. I think that it would be quite irresponsible for any independent review body not to do so if it expects its recommendations to carry real weight and authority, and if it is not simply to be regarded as a pressure group. I assume that the right hon. Member for Chesham and Amersham thinks so, too, despite the views of some of his colleagues, because this convention was established when he

himself was a Defence Minister in the previous Conservative Government.

Mr. F. A. Burden: Are we to understand, then, that for the next two years there will be no need to call upon the Review Body because the Government are determined to bring the pay of the forces up to complete comparability? Therefore, surely there is no need for any intervention or anything else from the Review Body.

Mr. Mulley: It is the job of the Review Body to assess comparable terms. I want to spell this out because there is much misunderstanding as to how it will work between 1979 and 1980.
The Review Body has taken account of pay policy in formulating its recommendations, but it has also drawn up scales of pay that are justified by outside evidence, and it has made absolutely clear what is needed to restore the Services to full pay comparability at a current date. The Review Body has produced the evidence this year to support the views that it expressed but did not quantify in its last two reports—that the Services, as we know, have fallen significantly behind their comparators since April 1975.

Mr. Burden: So we can take it—

Mr. Mulley: I shall explain the situation. Opposition Members seem to know everything, although they do not present their knowledge when they make speeches outside the House.
The spread of the lack of comparability was between 19 per cent. and 38 per cent.—

Mr. Churchill: Disgraceful!

Mr. Mulley: —with an average increase of 32 per cent. being necessary to restore it. But as the Review Body recognised in its 1977 report, one of the main reasons for this was that the pay for the Services becomes due in April each year, and there was a gap between April 1975 and immediately before pay policy was introduced.

Mr. Churchill: That is no excuse.

Mr. Mulley: I know that the hon. Gentleman has a public reputation to sustain—he was described by someone the other day as brash and loud-mouthed—but he can do it in his own speeches


without having to interrupt from a sedentary position in those of others.
Therefore, there was that element as well as the other factors that I have discussed. But the Review Body made it absolutely clear that the Government were not expected and could not be expected to make up the shortfall at once. We have to consider Armed Forces' pay in the wider context of pay policy and economic strategies generally. Nevertheless, the Government have accepted the recommendations of the Review Body that the Services should be given a firm commitment that the fully comparable rates of pay will be introduced over the next two years regardless of economic circumstances and regardless of the provisions of any pay policy which might be in operation over that period
This is a firm commitment which my right hon. Friend the Prime Minister has given to the House—which the House will recollect—that we shall restore Services' pay to full comparability, in two equal stages, by April 1980, and I regard it as the most important outcome of this Armed Forces pay review.

Mr. Victor Goodhew: Will the Secretary of State give way?

Mr. Mulley: I have given way very generously. All right.

Mr. Goodhew: Is the Secretary of State aware that the Top Salaries Review Body, which deals with Ministers' pay and the pay of Members of Parliament, is not required to say over what period it thinks that increases should be spread? It says what it thinks Members of Parliament and Ministers should get and leaves it to the Government to accept responsibility. Why is the Secretary of State leaning on the Armed Forces Pay Review Body and telling it to say over what period increases should be spread? This is a matter for the Government and not for the Review Body.

Mr. Mulley: We are still awaiting the report of the Top Salaries Review Body, as I understand it. I did not tell the Armed Forces Pay Review Body anything. I did not lean on it in any way. It was the Review Body's recommendation that the increases should be spread over two years. I accept the other point, of

course, that the actual decision is ultimately a matter for the Government, and I accept that responsibility.
What we need to make clear, because there is much misunderstanding about how this division is to be made—because the commitment is to full comparability on 1st April 1980; fully comparable with their comparators at that time—is that on 1st April next year, the Services will have a pay increase which will consist broadly of half the amount required to bring them up to the full military salary for April this year, together with whatever amount is required to update the award to April 1979. This, of course, will arise from a further recommendation in the AFPRB's 1979 report.
In 1980, the Services will receive the remaining half to bring them up to the full military salary assessed for April this year together with the appropriate updating between April 1979 and April 1980. The result will be that in April 1980 the Armed Forces will have the full military salary fully updated to the then current levels.
As to the immediate increase for this year, the Armed Forces have received the full 10 per cent. under the current guide-lines, together with an additional percentage representing a move towards the restoration of the full X factor in the military salary recommended by the Review Body. Other changes in allowances, and the holding of accommodation charges at their present level pending further review—which will be of especial benefit to the younger married men though it will apply also to all who live in quarters or single accommodation in barracks—will have the effect of adding a further 1 per cent. to the settlement. The result should ensure that Service pay does not fall further behind before the catching-up process begins next year.
It is nonsense for the right hon. Member for Chesham and Amersham to say that after this year's award the Services are still 32 per cent. behind. We are, in fact, acting in the full spirit of the recommendations of the Review Body.

Mr. Eldon Griffiths: I am grateful to the right hon. Gentleman for being so generous in yielding to interruptions. Is it his judgment that the measures that he has described will do the job? In other words, on the


best advice available to him, does he expect that the painful number of men who are now asking to leave the forces prematurely will be stopped by these measures?

Mr. Mulley: I hope so, but this is the difficulty in giving way. Hon. Members want me to condense the whole speech into one paragraph. I am coming to some considerations of the special problems of recruiting and PVR. As I say, I hope so, but it would be helped if the Conservative Party took a much more responsible view.
In its report the Review Body expressed some doubt about the basis of the rent element of the accommodation charges and has undertaken to look further into that. The Government have therefore decided that there should be no increase in charges in the meantime. This standstill will last until the Review Body has submitted further recommendations. I suspect that that will take at least a year.
We also decided to go further than the Review Body in increasing two allowances which are particularly important to Service men employed on emergency duty. We are doubling the Northern Ireland pay from 50p to £1 a day and increasing the rate of separation allowances by two-thirds of its present rate, that is by 66 per cent. It is absolutely right to do this, because these are the areas of extra duty where particular overstrain is felt. I thought it right to give them priority in this matter.
Also, as part of the 13 per cent. kitty, we have increased the additional pay—flying pay, submarine pay and the pay of parachutists, divers and hydrographers—to the full comparability of their additional pay.

Mr. Geoffrey Pattie: On the Northern Ireland point, can the Secretary of State say whether he thinks it fair that troops sent from BAOR to Northern Ireland should find that their families cease to receive the local overseas living allowance in Germany? Could not something be done about that?

Mr. Mulley: That is not strictly accurate. The families remaining in Germany receive the local overseas allowance. The soldier does not get his

because one cannot have an overseas allowance while serving in the United Kingdom. Of course, he immediately gets the Northern Ireland allowance and the separation allowance. That is one of the reasons why I was so anxious to increase both.
Although this year's immediate award is not as generous as some Conservative Members would have liked, it is important to realise that it helps considerably. Privates will get increases of between £5 and £8 per week; corporals, increases of between £8 and £10; warrant officers, £10 to £14. Among officers, majors' salaries will be increased by between £673 and £841 per year and the salaries of colonels by between £1,057 and £1,325.
These increases are obviously substantial and are made more significant by the changes in income tax which the Chancellor introduced in his Budget and which were intended, as in previous years of pay policy, to give real increases in take-home pay without adding to the inflationary pressure in the economy.
There is another feature of this settlement that I should mention. It has been decided that for those who retire from the Armed Forces between April 1978 and April 1980 their pensions will be calculated on the basis of the fully comparable rates of pay which the Government have acknowledged are appropriate and would have introduced but for the requirements of pay policy. There are several precedents for treating pensions in this way, although none, I think, under the last Conservative Government.
This decision will mean, for example, that a retiring corporal aged 40 with 22 years' service will get an extra £241 on his pension; a warrant officer aged 50 with 32 years' service will get £426; a major aged 50 with 29 years' service will get an extra £524. In addition, there are significant improvements in terminal grants—for example, in the case of a corporal, an extra £723. These decisions will add 14 per cent. to the Armed Forces' pay bill and I am sure that the country and this House agree that they represent a fair deal for the Armed Forces. It is a deal which recognises the Armed Forces' unique position, and it is a deal which treats them exceptionally at a time when virtually all pay settlements in this round have been at or below 10 per


cent. I think it is the most which the Government could have been expected to do, and I hope that the Services will recognise, and take heart from, the exceptional way in which they are being treated, both in the increase they will receive this year and in the commitment they have been given for the next two years. Indeed, the pension arrangements underline the full commitment of the Government.
One difficulty in selling this forward policy has been doubt in the Services—if there is an election and the Conservatives should come in—about whether the Conservatives would carry out the promises which they make today. I hope that the event will not happen, but I have said that, if it should happen—if the country were to go mad again as it did in 1970—I believe that the Conservatives are so committed that they cannot run away. However, many people remember the election promises of 1970 about the slashing of prices at a stroke.
Therefore, the utterances of the Opposition, which the soldiers can see through as political manoeuvring, are one of the problems. I hope that the right hon. Member for Chesham and Amersham has full authority for the commitment that he has given today and I hope that he will also say that they will do it regardless of the economic circumstances. If they do become the Government, in the light of the way in which, in three-and-a-half years, they frittered away the sound economic position which this Government left in 1970, anything could happen.

Mr. Tebbit: He has got a sense of humour afer all, this fellow.

The Prime Minister (Mr. James Callaghan): Order, order—do not be so damned rude.

Mr. Mulley: I want now to turn to the point which is of great importance—the disturbing increase in the number of officers and men applying to leave the Services prematurely. As I have told hon. Members many times, we are watching the situation very carefully. Chapter 4 of the Statement on the Defence Estimates 1978 drew attention to the significant increase in the number of trained officers and men who had applied for PVR in the Army and RAF and stressed the experience and skill of those leaving.
Between 15th February and 15th May, Ministers replied to 37 parliamentary Questions on all aspects of the outflow from the Services and the information requested was always supplied if it was readily available. The figures give cause for concern, particularly as it is often highly skilled and experienced men such as aircrew and technicians who have been seeking to leave.
However, I believe that this should be viewed in its proper context. About 40,000 people leave the Armed Forces every year, most of them in the normal way, on completing their engagements. The number leaving prematurely at their own request regularly make up between 20 and 30 per cent. of that figure, so we are not talking about a new phenomenon.
The Government recognise that uncertainty of pay and conditions of service has been a significant consideration in individual decisions to leave the Services. I said, and I say again, that the re-engagement rates for the Navy and Air Force in 1977 were favourable compared with the year before, 1976, and in the Army they were about the same. I am sure that this pay award and the commitment to restore full comparability within two years will have relieved this uncertainty. I hope that it will have the effect of reversing the recent trend and will reassure those who may be considering joining the Armed Forces that the Services continue to offer an excellent career to suitable young people.
Hon. Members will be aware that we have given priority to those with particular skills by increasing by 50 per cent. the major forms of additional pay, such as flying, submarine and diving pay. To give some examples, a flight lieutenant in the Royal Air Force with two years' seniority will receive an addition of £427 to his flying pay which, taken together with his increased military salary, will give him an extra £991 per year. A submarine commander with two years' service will receive an increase of £376 in his submariner's pay which, taken together with the other increases, will give him an extra £1,307 per year. These are significant increases, but it will be some weeks before it will be possible to draw any conclusions about the numbers seeking to leave since the latest pay award was


made, although the first reactions have been quite encouraging.
As the right hon. Gentleman pointed out, pay is only one of many factors which enter into a man's consideration whether he should join or remain in the Services. The report has, I believe, done much to re-establish the confidence of the forces in the Armed Forces Pay Review Body. The general verdict on the settlement seems to have been that more could not reasonably have been expected, given the need for continued pay restraint. Obviously, the forces would have preferred an early return to full pay comparability, but I have made clear again this afternoon the firm nature of the Government's commitment, which has been underscored by the decision to base pensions on the full rate. This decision was very well received.
Although Opposition Members may scoff, I stress that there has not been the same copper-bottomed commitment by the Conservative Party. Its record over the years in keeping its promises has not been impressive. As Aneurin Bevan used to ask, "Why gaze into the crystal ball when one can read the book?".

Sir Ian Gilmour: The right hon. Gentleman has now said the same thing twice, and he was wrong both times. Plainly, our pledge is rather more copper-bottomed than is the Government's, our record in respect of the Armed Forces is much better than Labour's, and we have said that we will restore comparability next year, which is considerably better than 1980. As there is considerable interest in the way the right hon. Gentleman and the Prime Minister have treated the Chiefs of Staff, I hope that he will not skate out of answering questions which I put to him on that matter.

Mr. Mulley: I can answer shortly and simply. I am very surprised that the right hon. Gentleman should have given public utterance immediately, and has subsequently repeated it, to a doctrine which, on reflection, I am sure he will feel unwise—that is, that public servants, whether military or civil, should have the right, if they so decide, politically to express themselves as to views or to be involved in public controversey against the Government. This is a constitutional point of very great importance.
The information was certainly not classified. The information would certainly have been very appropriately given at the time the Government's decision was made. On the question of the Chiefs of Staff not having their points of view and their very important considerations before the Cabinet, I would point out that, as the Prime Minister disclosed, he read a long submission from the Chiefs of Staff. He did not read the document to himself, but read the whole of it to the Cabinet so that they were fully informed as to the concerns of the Chiefs of Staff. But if the Conservatives are ever to form another Government and intend to license the whole of the public service to issue anything they like and to give any briefings they like on matters of party political controversy, I think they will live to regret it.

Sir Ian Gilmour: The right hon. Gentleman is not answering the point.

Mr. Mulley: I do not answer hypothetical questions. If the Chiefs of Staff had wished to brief the Press about matters of a factual character of this sort, I should have been sympathetic to that request. The question of when they would have done it would be another matter. The figures have been given and will be given in the ordinary way in answer to Questions, Government statements and so on.
To conclude, I wish to point out that there is no difference on this side of the House about the vital role which the Armed Forces have to play in the country's defence and the valuable contribution they make to the life of our community in many other respects. I wish to pay tribute once again to the dedication, skill and courage of our Armed Forces in their important role. I wish to convey on behalf of the whole House the appreciation of the Government and right hon. and hon. Members in all parts of the House to the Armed Forces for the work which they undertake.
Although it has not been possible in this pay settlement to award the Armed Services financially as much as they deserve, I am sure that the Service personnel understand the need for pay policy and the importance of its success to the economic future of the country and in providing the necessary defence expenditure. On these grounds I ask the House to reject the motion.

5.17 p.m

Mr. J. Enoch Powell: I make no apology for the fact that my contribution to this debate will be limited to matters affecting the Ulster Defence Regiment. That is not in reality a limitation at all, since the Ulster Defence Regiment is an integral part of the Army, and the function which it performs and the burdens which it carries relieve proportionately the demands placed upon the rest of the Regular Army.
It has been the development of the Ulster Defence Regiment which, along with the strengthening of the Royal Ulster Constabulary, has made it possible to limit the prejudice which service in Northern Ireland does to the training and commitments of the Army elsewhere. My hon. Friends and I look forward to the role of the regular Army in Northern Ireland progressively becoming more normal, in the sense that tours there will be longer and that the units stationed in Northern Ireland will be able to carry out their normal training as part of general service. If this is to continue—and it will be the continuation of an existing trend—the Ulster Defence Regiment must not only maintain its existing strength but the full-time element must become increasingly important.
It was the object of my hon. Friends and myself at the beginning of this Parliament to see the regular full-time element of the Ulster Defence Regiment greatly expanded. In fact—I think, in one of the earliest relevant debates—we specified as the appropriate aim a proportion of one company per battalion of full-time UDR to the UDR as a whole. Something approaching that proportion has been attained in the last two years, and this increase in the full-time element of the UDR has been one of the most favourable aspects of the development of the security forces in Northern Ireland.
It was therefore appropriate that the Secretary of State in his speech should make specific reference to the conditions and pay of the UDR, because it will be upon the comparability—that is a word which has been much used already in the debate—of the conditions and pay of the full-time UDR men and women with the corresponding pay and conditions of the rest of the Regular Army that our hopes must rest for not merely maintaining

but improving the performance and numbers of the full-time element of the Ulster Defence Regiment. Important—indeed, overwhelming—though the part-time element of the UDR is, the effectiveness and functioning of the part-time element is dependent upon the full-time cadre and its availability throughout the 24 hours and in all parts of the Province.
We recently brought to the attention of the Government—not for the first time—in prospect of the defence review report and of the decisions being taken upon pay, three specific respects in which the position of the full-time UDR member differed unfavourably from that of the Regular soldiers with whom he was serving side by side in Northern Ireland.
Service for the full-time UDR means not merely exposure to the same risks as the Regular forces there but exposure to a certain higher level of risk. The UDR live as members of the general population, and their families live at home all over the Province. They are thus much more vulnerable than the members of the Regular forces to attempts—which have hitherto been strikingly unsuccessful—to dissuade citizens by murder and violence from joining the UDR or continuing to serve in it. In my own constituency I can think of a number of men, some of them Roman Catholics, who have set at naught threats backed by force and acts of violence, which were designed to deter them from remaining members of the UDR and carrying out their duties in it.
Three repects in which the UDR is still at an unfair disadvantage with the Regular Army are as follows.
Until recently, there was a rule whereby the basic pay of the UDR for ranks above corporal was 95 per cent. only of the corresponding pay for the Regular forces. I am not clear how far this situation has been modified as a result of the recent pay review and the decisions which have been taken following it. Figures which have become available in the last day or two—I am obliged to the Secretary of State for supplying my hon. Friends and myself with details—appear to indicate percentage increases for the UDR which will diminish the anomaly to which I have referred, an undefensible anomaly, since, if it be argued that the 5 per cent. represents the whole or part of the famous X-factor in the pay of the Regular soldier, the conditions which the X-factor was


designed to offset apply equally above or below the rank of corporal.
It would be helpful if, when the Minister winds up the debate, the percentage increases could be inverted so as to indicate the degree, if any, of disparity which will still exist between the basic pay of the UDR and that of the Regular forces at different levels. That is the first element of difference which we would wish to see greatly reduced, if not eliminated.
The second element relates to the cost of living which has to be confronted by the full-time member of the UDR as by the Regular Army serving in Northern Ireland. It is probably widely known, but perhaps not as widely known as it should be, that the cost of living for ordinary people in Northern Ireland is higher than in any other part of the United Kingdom. Steps have been taken increasingly in recent years to protect the Regular Army serving in Northern Ireland from the impact of those conditions.
I refer to two aspects of the cost of living against which the two forces have been very differently protected. I deal first with food. In the Regular Army all single soldiers receive their food free and all married soldiers receive a food allowance of 50p per day. On the other hand single full-time UDR men receive only a 50p per day food allowance, compared with the full cost of food of which the coresponding Regular soldier is relieved. Thus, the unmarried full-time UDR man is at a disadvantage compared with his Regular comrade in respect of food.
It may be said that that does not apply to the married UDR man. However, the family of the married Regular soldier normally has access to the NAAFI, and I think it would be admitted that, compared with the levels of prices prevailing generally in the different parts of the Province, the family of the Regular soldier stationed in Northern Ireland has a decided shopping advantage over the family of a Regular UDR man living at home, wherever that may be. There is, therefore, a distinct gap—though it affects differently the single and the married man—as to the cost of food. We contend that the full-time member of the UDR is entitled to the same protection as his Regular equivalent against the high cost of that element of the cost-of-living index.
More serious is the position as regards rent. The full-time UDR man receives nothing in respect of rent—neither his own rent if he is single nor, if he is married, the proportion of the rent paid for his family and himself which is attributable to his own needs; and it is worth remembering that at present the Housing Executive rents—it is on local authority or Housing Executive rents that rent costs for the Armed Forces are by agreement calculated—are being annually and rapidly increased.
The position of the Regular soldier serving in Northern Ireland presents a complete contrast. The Regular soldier receives free accommodation with, in Northern Ireland, no offset against his pay. So there is a big difference in the real remuneration of the single full-time UDR man and the single Regular soldiers. The married Regular soldier, for his part, receives an allowance which puts his element of the cost of rent of his family in the same position as it would be if he were single: he receives an allowance which cancels out his element in the rent costs for his family. Thus we have, in effect, relieved the Regular soldier serving in Northern Ireland of the whole burden of rent in respect of himself whether he is married or single, while his UDR comrade, serving side by side with him, is carrying the full burden of rent.

Mr. David Walder: In a sense, I am seeking information from the right hon. Gentleman. Is there no discernible difference due to the fact that the married UDR soldier is living at home, whereas the Regular soldier in Northern Ireland is obviously living not at home but in rented accommodation?

Mr. Powell: Most of the regular UDR men are living in Housing Executive rented accommodation; and I have referred to the recent and successive adjustments of those rents. It is true that the UDR man lives in his permanent home; but that does not serve to protect him against the levels of rent and living costs prevailing in Northern Ireland and therefore leaves intact our claim that while we have protected the Regular Army serving in Northern Ireland against these factors, the full-time UDR man is largely, and in respect of rent for himself wholly, unprotected.
We believe that this is a gap which needs to be closed. If we are to go on relying increasingly in Northern Ireland upon the UDR and therefore upon retaining and recruiting a full-time UDR, we cannot carry on with this degree of differential, I was interested to notice the undertaking of the Secretary of State in his speech that the differences to which I have drawn attention—and I have not gone over the full gamut—would be considered by the Government "very sympathetically". I noted that expression, but it can mean something or nothing.

Mr. Michael Mates: Nothing.

Mr. Powell: I would not wish to take that view, but I expect that when the Minister winds up the debate, specific reference should be made to the lack of comparability between the UDR and the Regular Army and that the assurance which I believe was sincerely and practically meant by the Secretary of State should be reinforced.
I close by reiterating that what is done for the UDR is done for the Army as a whole. It is in the interests of the defence effort as a whole that the UDR in Northern Ireland should have maximum efficiency. The Secretary of State understands that, and he now needs to accompany that understanding by further steps to remove the disparity between two forces which, in Northern Ireland, are doing the same work and doing it together.

Mr. Mulley: I certainly endorse what the right hon. Gentleman has said in tribute to the UDR. We all remember unhappily that of the nine members of the Armed Forces killed this year four have been members of the UDR. I have the greatest admiration for the courage and devotion to duty of the UDR.
Certainly we shall examine what the right hon. Gentleman has said. As a result of correspondence and previous discussions, I announced help over one of the difficulties that arose from the conditions of last year, namely, that members of the UDR can have food free at public expense without losing their 50p a day allowance.
However, perhaps it might be better for my right hon. Friend to try to deal

with the points raised by the right hon. Gentleman when he winds up the debate. I am not sure, though, that in the course of the rest of today we can settle all the points that the right hon. Gentleman has raised.

Mr. Powell: I am obliged for that intervention. Of course I do not expect the Secretary of State or his right hon. Friend to stand up today and read out a specific detailed response. However, it is necessary, and has been rendered more necessary by the generous words the right hon. Gentleman used about the UDR—that the urgency of doing something to remove the disparities should be recognised. If it is recognised, action should follow.

5.36 p.m.

Mr. J. P. W. Mallalieu: I very much hope that my right hon. Friend will take some action about the anomalies affecting the UDR which have been put so cogently and without rancour by the right hon. Member for Down, South (Mr. Powell).
The right hon. Gentleman's speech was in striking contrast to that of the hon. Member for Chesham and Amersham (Sir I. Gilmour). I see that he is a Privy Councillor. I should have referred to him as a right hon. Gentleman and after the courage he showed in attacking Aneurin Bevan, Richard Crossman and Morgan Phillips, when they are safely dead, the right hon. Gentleman will expect me to give him the title of "gallant" as well.
In fact, the best title for the right hon. Gentleman is one that he gave himself. When, in gentlemanly fashion, he appointed a new editor of the Spectator without troubling to mention to the existing incumbent that he was to be sacked, the right hon. Gentleman said publicly:
I know that I have behaved like a …".
Here he used a four-letter word that I must not inflict upon the House. I am sorry that I cannot use that word because it describes exactly and precisely what I think of the right hon. and gallant Gentleman.
It is extraordinary that a great party such as the Conservative Party should choose as its spokesman on a matter of such importance as defence a Member such as the right hon. Member for


Chesham and Amersham and should couple him with his noisy little chum the hon. Member for Stretford (Mr. Churchill).
The fact that those two have been chosen to speak for the Conservative Party on defence would justify our believing that the Conservative Party does not take defence seriously and has no interest in the welfare of Service men. I know that this is not true. I have listened to enough debates and heard enough Conservative Members speak to know that many of them have a great interest in and knowledge of this subject.
I can only assume that the fact that the great reserves of talent on defence that exist on the Conservative Benches have been ignored in favour of these two is another example of the gross errors of judgment to which the Leader of the Opposition is, unfortunately, so prone.
We heard again from the right hon. Gentleman the dreadful myth—the mischievous and malignant myth—that we on these Labour Benches do not care for the welfare of Service men. It is totally untrue. But what I fear is true is that, although the improvements in Service conditions have been great in many ways since the last war, neither Labour nor Conservative Governments have ever succeeded in producing real justice for the men in our Armed Forces.
The original ideas which lay behind the restructuring of Service pay in 1968, 1969 and 1970 were sound. The idea of having a military salary in place of the hotch potch of pay and allowances which then existed, so that Service men would know exactly what they were getting, was a good idea. It was a good idea to have job evaluation so that it would be possible to have some knowledge of corn parability between the job which a man did in the Services and a similar job done by civilians outside, and some recognition of comparability between their rates of pay.
It was a good idea to have the X factor to make up for the balance of disadvantage, if disadvantage it was, of being a Service man as opposed to being a civilian.
The snag is that it has not worked out right. These good ideas have been in part defeated, partly by various pay

policies but much more by the regular and persistent wages drift, to use the current jargon, since pay policy refers to basic wage rates, not to earnings, and earnings in civilian life can be increased by overtime, by night shifts or by productivity agreements but earnings in the Services cannot be so increased. Inevitably, therefore, again and again, although one may have comparability at the start, as a result of wages drift the disparities widen between Service pay and pay for comparable jobs in civilian life.
We shall not get this matter right simply by increases in the basic pay of Service men. We must make sure that an allowance is made in Service pay for this wages drift. In my view, the way to do it is to increase the X factor to a certain extent. Each year, we ought to make an estimate of what will be the increase in earnings—earnings, not basic pay—in civilian life—in other words, what will be the wages drift—and put that, or a proportion of it, into the X factor.
If we do that, it will probably mean that for a time during the course of 12 months Service pay will actually be higher than the comparable rate of civilian pay, and then, towards the end of the year, it may well come below comparability again, but over the 12 months we shall have equality. I do not believe that it is possible to overcome the constant problem of the widening gap, the problem that, after every attempt of the Government of the day, whichever party is in power, to narrow the gap, we see it widening once again, unless we employ some such system as the one which I have suggested and put that consideration into the X factor.
When I last addressed the House upon defence matters I made a mistake. I said that it would be the last time that I should speak, and I am sorry that I have not kept my word. But I am not myself one who favours the idea of having a trade union in the Armed Forces. I have listened and shall listen to the arguments, but I am not convinced that it would be right. But until some such thing is done, until we have trade unionism in the forces, we must rely for justice for our Service men on two bodies. One is the Review Body, which, as we all think, does an admirable job. The other is the House of Commons.
That is why I think it important—I congratulate them at least on this—that the Opposition have given up a Supply Day for a debate upon the welfare and pay of the Services. It is important that we should regularly have defence debates separate from defence policy. We should have debates here in the House about the welfare of the men who serve our country in the Armed Forces. I therefore hope that this semi-precedent which has been set today will establish a regular pattern for the House of Commons.

5.47 p.m.

Mr. Emlyn Hooson: I am sure that I speak for the whole House when I say how greatly we enjoyed hearing the hon.—and, may I add, gallant—Member for Huddersfield East (Mr. Mallalieu) on this important subject. He did well to explode the myth, which I hate as much as he does. Everyone who served during the last war, as the hon. Gentleman did so gallantly, knows perfectly well that it is pure myth that only the Tory Party is interested in the welfare of the Services. It is a myth, and one greatly resents its exploitation.
In common, I think, with most right hon. and hon. Members, though not all, I wish to see this country with well-equipped, well-paid and well-trained Armed Forces, modern forces suitable for the defence of this country in association with our allies. What I hate to see is the political exploitation of the Armed Forces for party purposes, and at times recently the Conservative Party has at least come desperately close to appearing to give the impression that that is what it wants to do.
I do not share the low opinion of the right hon. Member for Chesham and Amersham (Sir I. Gilmour) which was expressed by the hon. Member for Huddersfield, East, but I thought that he fell below his usual standard today and made what I felt was a rather deplorable speech. It gave me the impression that the orange has been squeezed almost until it is absolutely clear of juice and he is now concerned to squeeze the pips to see whether there is anything left.
The question of the Armed Forces in a society such as ours is of great importance. It is no use hon. Members referring, say, to the Tribune Group, for it is well

known that there are a number of pacifists in its membership and there are a number of other members who, though not pacifists, do not agree that Britain should be associated with NATO. One might as well bring in the speech of the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) the other day when he threw doubt on the reliability of the United States as an ally. Does that represent Conservative policy or the official view? Of course it does not.
On whichever side of the House they sit, the majority of hon. Members believe in NATO and this country's association with it, and they appreciate the need for having forces of high morale to fulfil our obligations to NATO. But in these debates many tend to overlook the fact that expenditure on the Armed Forces is public expenditure. In no way can it be dissociated from the country's economic state. When Conservative Members argue the great need for stringency in public expenditure and the need to curtail it, they never specify which particular aspects of public expenditure they have in mind. But one very important aspect of public expenditure is defence.
I believe that the greatest threat to the West is internal, and that if we allowed our economy to get into decay or there was a serious disparity in the ratio between defence expenditure and the country's economic welfare, we should be in great danger. I believe that the situation in Italy at present and the situation that prevailed in Spain and Portugal in the course of the past two or three years are sufficient warning to all of us that the great danger to our country and the whole of the West is insurrection from inside coupled with military pressure from outside. We must safeguard ourselves against both.
I turn to the particular question of Services pay. When I was Liberal defence spokesman on a previous occasion I had reason to attack the Conservative Party for its failure to maintain adequate Services pay. The truth is that under the Conservative pay policy in 1973, just as under phase 1 and phase 2 of this Government's policy, the Services fell sadly behind, as did many other groups. The police have fallen behind, as have the firemen, the doctors and the dentists. Many special groups have fallen behind.

Mr. Churchill: None by as much.

Mr. Hooson: The righ hon. Gentleman, who takes up so much time on his own speeches and makes such a noise now, might at least spare me whilst I am making my speech.
Under any pay policy—which, after all, is designed to safeguard the country's economy—productive industry tends, because of the very nature of bargaining within it, to have advantages which accrue to the public services only at times of greater economic equilibrium. At a time of economic equilibrium the public services are normally in a stronger position to put pressure on the Government, and then productive industry is often in a less favourable position. I think that that has been the experience with pay policy under Conservative and Labour Governments. Those with industrial muscle tend to gain the advantage while the pay pause or the pay policy is on, because they risk breaking the policy, whereas it is very difficult in the public services to do so.
That is why in the spring of 1975 when the Pay Review Body was reviewing Services' pay, it found that the Services had fallen way behind in comparability over two or three years. As the Secretary of State pointed out, the Government did something about it. The same thing has happened again. What is more, the present Government instituted a number of cuts in their first two or three year in office which affected the morale of the Services. I thoroughly disapproved of those cuts. But exactly the same thing happened under the Conservative Government in 1972–73. There was a series of unheralded cuts.

Sir Ian Gilmour: No, not in 1972.

Mr. Hooson: There were, and the right hon. Gentleman knows it.

Mr. Mulley: May I remind the hon. and learned Gentleman that there were three cuts in 1973, and in total, at current prices, they amounted to more than those I have made since I have been in office?

Mr. Hooson: The truth is that it is easier for an Opposition to try to exploit the Services, as the Conservatives are

doing now. When a Tory Party is in Opposition it is a better friend of the Services than when it is in power.
Is it possible to restore the comparability of pay in the Armed Services before 1980. That is the issue before the House. Is it sensible from the point of view of the country to do so? Can the risk be taken? I do not think that it can, for this reason—

Sir Ian Gilmour: The Lib-Lab pact.

Mr. Hooson: In the right hon. Gentleman's absence I described his speech as most mischievous. It fell far below his usual standard. I want to say this to his face, because he was not here when I began my speech. He gave me the impression that he was trying to exploit the Services politically for party purposes. I think that that is a shocking thing to do.
The right hon. Gentleman was a supporter of the right hon. Member for Sidcup (Mr. Heath) when he introduced a pay policy. As I recollect it, the right hon. Gentleman was one of the fervent supporters of his right hon. Friend. Yet today he was saying things about the Government's pay policy which he would have disdained had they come from the then Labour Opposition, as indeed they did when the right hon. Member for Sidcup was trying to implement his pay policy.
One of the things that is reprehensible about this country is that when in Opposition the Conservative Party and Labour Party have been trying to shoot down each other's pay policy, against the country's interest, for small, short-term party advantage.
Everybody is aware that there has been a crisis of morale in the Services.

Mr. Eldon Griffiths: There still is.

Mr. Hooson: There was, and these crises do not disappear overnight, as the hon. Gentleman knows perfectly well.
I recently saw figures from the United States and learnt of the great concern there over the loss of skilled personnel from the Armed Services. Highly trained, technically highly skilled personnel are at a premium in industry. They are easily absorbed into and tempted away from the Armed Services.
The same thing happens in this country. I suppose that that is why the Government have found it necessary to increase by 50 per cent. such items as flying pay, submariner's pay, diver's pay and so on, for exactly the same kind of reason as has been found necessary in the United States.
The issue before the House is whether it is possible to restore the Armed Services to full comparability in the next year as opposed to 1980. I do not think it is worth taking the risk. Hon. Members know perfectly well that if it were done for the Armed Forces it would be regarded as a precedent for every other pressure group in the country. The hon. Member for Bury St. Edmunds (Mr. Griffiths) represents the police. If the Edmund-Davies Committee recommended less than was recommended for the Armed Forces, would not the hon. Gentleman regard it as a precedent? Would not Labour Members below the Gangway, who exerted so much pressure on behalf of the firemen and so on, regard it as a precedent? Of course they would.

Mr. Eldon Griffiths: May I explain the matter to the hon. and learned Gentleman very simply? There is an independent Armed Forces Pay Review Body. There is now, I am glad to say, an independent Police Pay Review Body. I believe that it is right for the Government of the day to accept the objective, independent and impartial findings of those bodies and implement them.

Mr. Hooson: That is what the Government are doing with regard to the Review Body recommendations. Over what period it is to be implemented is a question that must rest with the Government. If the hon. Gentleman is saying that any Government—Conservative, Labour or whatever complexion—can implement these matters with regard to the economic state of the country, he is not living in a state of political reality.
There has been a considerable change of heart by this Government in the past year as compared with their record between 1974 and 1977 with regard to the Armed Forces. We welcome that. There is a gradual restoration of morale and my colleagues and I in the Liberal Party will certainly do all that we can to

make sure that the process is continued. We shall give full support to getting the Services back to full comparability in pay.
My experience, and I have a number of friends in the Armed Forces, is that they do not want special treatment; they want fair treatment. They realise that there are many groups in the country who think that they have had unfair treatment in the past few years. They do not want to be singled out for special treatment. What they want to do is to make sure that they are in no way handicapped by the fact that they are in the Armed Forces and that they have a deal similar to that awarded to the other special cases we have all heard about. I believe that they will get such a deal, and I shall support it.

6.0 p.m.

Mr. Alan Lee Williams: I find myself, not for the first time, in complete agreement with the hon. and learned Member for Montgomery (Mr. Hooson) over the way in which he has presented his case. I share his apprehension about the way in which the Opposition have introduced the subject. The way in which they have tackled this issue throughout is damaging to Service morale. I congratulate my right hon. Friend on the modest way in which he spoke against provocation of the most extreme kind.
I hope that the right hon. Member for Chesham and Amersham (Sir I. Gilmour)—whose speeches in the past on this subject have always been models of responsibility—will consider matters carefully before making another speech on the lines which he took this afternoon. I am beginning to wonder why the right hon. Gentleman is making such speeches. The last two speeches which he has delivered from the Dispatch Box have begun to disintegrate. I believe that this has something to do with his right hon. and hon. Friends who surround him on the Opposition Front Bench. I warn the right hon. Gentleman that he will lose respect in all quarters of the House if he pursues that line.
I agree with my hon. Friend the Member for Huddersfield, East (Mr. Mallalieu), who spoke earlier in the debate, that justice for the Armed Forces is not a narrow party matter. Feeling for the Services runs equally on both sides of


the House. The pressures of incomes policy have made it difficult for the independent Review Body to make recommendations which the Government could readily accept.
I firmly believe that the independent element is right. What concerns me is that the Services appear to have no confidence in the independent review structure, which seems to be a sorry state of affairs. Above all, they seem to be deeply suspicious of the Chiefs of Staff. The view that has been expressed to me by Service men is that they believe that the Chiefs of Staff were not strong enough or tough enough in their attitude towards salaries and conditions. In part this explains the rather defensive way in which the Chiefs of Staff have reacted.
The course of action of the Chiefs of Staff in leaking certain information—not highly classified information, since my right hon. Friend has admitted that it could have been obtained by parliamentary Questions—is highly damaging to the stature of Chiefs of Staff. Such action is damaging not only in respect of their relationships with Ministers but in respect of their relationships with Parliament and, through Parliament, with the Crown. I hope that when my right hon. Friend spoke to the Chiefs of Staff he made it quite clear that any repetition of this attitude would bring swift retribution.
If the Chiefs of Staff were concerned about the position and felt that in all the circumstances the Government did not intend to do the right thing, they had one honourable course open to them, namely to resign—

Mr. Churchill: The Secretary of State is the one who should resign.

Mr. Mates: rose—

Mr. Williams: The Chiefs of Staff chose not to resign.

Mr. Mates: rose—

Mr. Deputy Speaker (Sir Myer Galpern): Order. If the hon. Member for Hornchurch (Mr. Williams) does not give way, the hon. Member for Peters-field (Mr. Mates) must resume his seat.

Mr. Williams: I fully understand why the Chiefs of Staff chose not to resign.

Mr. Mates: rose—

Mr. Williams: That was a mistake. I believe that in matters of this sort the tradition which has recently grown up of not resigning is a dangerous one. If the Chiefs of Staff felt as they did, that was the honourable course for them to pursue. I look upon this matter as a grave one, irrespective of whether the information they leaked was classified.

Mr. Mates: The hon. Gentleman is wrong. The Chiefs of Staff had two options open to them. Written into the constitution of their office is the right of direct access to the Prime Minister, the right to address him on matters which, in their view, seriously affect either the morale or the efficiency of the Services. Does the hon. Gentleman approve when that option is taken away from them?

Mr. Williams: That is an erroneous point. It does not detract from what I was saying.

Mr. Mates: Why is it erroneous?

Mr. Williams: I was making the simple proposition that if the Chiefs of Staff were so unhappy about the position, they had one course open to them—

Mr. Mates: Two.

Mr. Williams: They did not choose to take that course. I go further and say that they have done damage to the constitutional proprieties. I believe that they will regret their decision.
Above all, it is the Armed Forces about which we ought to be concerned. We ought to be concerned about the attitude and the suspicion that somehow they believe there is a conspiracy on the part of both sides of the House to reach an agreement at their expense. They have a deep cynicism and suspicion about both sides of the House. My hon. Friend the Member for Huddesfield East referred to that when he said that, in the light of history, there was some justification for that attitude. If we are to reassure the Armed Services we need a better input in respect of their grievances and how they see them. I disagree with some of my hon. Friends who say that the only way to overcome the difficulty is to argue the case for trade unions in the Services.

Mr. Doug Hoyle: I shall be arguing that case.

Mr. Williams: I believe that argument to be as dangerous as the behaviour of


the Chiefs of Staff. It is totally unnecessary to introduce trade unions into the Armed Services. I profoundly believe that we have to introduce into the process some means of representation for those below the rank or brigadier. I am sure that there are many ways in which that could be done and I do not intend to outline them this afternoon. The criticism made by officers and men below the rank of brigadier is such that in some way or other machinery must be found for them to put their view as vigorously as possible.

Mr. Mallalieu: Would it not be possible to have a serving officer, say a major or colonel, plus one other rank on the Review Body, to serve for a term of two years?

Mr. Williams: That is an excellent suggestion. I hope that my right hon. Friend will have something to say about that. It is important that the Armed Services feel that their point of view is being represented in the highest councils. At present they do not believe that. Rightly or wrongly, they do not have confidence in the present procedure.
I realise that some of the things that I have said may be looked upon as being rather harsh on the Chiefs of Staff—

Mr. Eldon Griffiths: Irresponsible.

Mr. Williams: I do not believe them to be irresponsible. I believe that I have spoken with some reflection and measure. The Chiefs of Staff at present enjoy my confidence and, I think, the confidence of both sides of the House. There is nothing incompatible in that with what I said earlier. I believe that they made a mistake in the way they leaked information in the Press, but that does not mean that I have no confidence in them.
What I have to say must not be represented as an attack on the Chiefs of Staff. I fully understand that they cannot reply publicly to these matters. But the gravity of the way in which they have behaved must be brought home to them, and I think it right to speak out forthrightly from this side of the House.

6.10 p.m.

Colonel Sir Harwood Harrison: The Prime Minister and his Government have, in my view, failed in the delay that

they have imposed on the Services. Perhaps it is a case of too little, too late. The Prime Minister himself comes from a Navy background, and I am sure that he must have been aware of the feelings in the Services. He saw to it that people like the police, the firemen and the miners were given their awards, and he should have brought forward the report of the Review Body so that the Cabinet could have acted upon it at once. In the light of the views expressed throughout the House, I am sure that he would have got the support of the whole House for such action.
This is a human problem—a problem of men, their wives and their children. The real difficulty is not so much pay as the things associated with it. Our Services are full of patriotic men. I see a lot of them. They want the new weapons almost as much as they want the pay. If they cannot get those weapons, it is perhaps natural that they should begin to talk more about pay. A number of points have been made about pay, but I think that they need to be repeated and can bear repetition.
One thing that annoys Service men is the fact that the military forwarding organisation baggage allowance has been frozen for many years and is now totally inadequate. Then there is the fact that Service men abroad, with limited exceptions, cannot claim unemployment benefit for dependants; nor can they claim family income supplement. There are many places in the world where the Army has to be sent. Perhaps they are used to their wives going out to work when they are in England, but there is no opportunity for them to do so in Germany or Ireland.
Then there is the fact that Service men lose their entitlement to local government overseas allowance for dependants over 16 when they would be entitled to draw supplementary benefits in the United Kingdom. There is also the fact that a Service man cannot claim allowance for storing furniture in his own home or claim for the payment of rates. Again, pensions linked to pay rates have been severely restrained, and I was glad to hear from the Secretary of State today that this will not be so in future. We are all grateful for that.
Surely all that has happened in Zaire in the last few days should have made us


realise more than ever our responsibilities for our Services. Perhaps there should have been some criticism—but I will not enter into this—because we did not send forces as France and Belgium did to get out their nationals, although I know that some of our nationals could come back in the planes which took out medical supplies. We do not always want to be dependent entirely upon other countries.
Although I do not want to label the Government with full responsibility for all the inflation we have had, they must reflect that if that inflation had not been there we should not have had this outcry about Service pay. Perhaps it was the firemen's strike more than anything else that brought the public to realise the low state of pay of the Services, with Service men acting as firemen for less pay than the firemen were getting at that time and over which they were striking.
In previous pay reviews, something has always been taken off, either as rent for quarters or for food. I am delighted to hear that there are no strings attached this time to the pay increase as recommended by the Government. But it is so much below the 32 per cent. recommended by the Review Body, and by the time it is implemented it may well be that in such conditions the Review Body would have recommended instead 45 per cent.
In voting for the motion tonight, I bear no personal animosity towards the Secretary of State for Defence. But I record my vote as happily as I have ever done because that is our parliamentary way of expressing our great belief in our Armed Forces and the men who serve in them, with all the valuable work they do, and also our support for their wives, who have to go out and do the shopping, and their children.

6.18 p.m.

Mr. Bernard Conlan: I begin by making a firm declaration that I stand second to no one in support of the Armed Forces. I find it sickening to listen to Conservative spokesmen railing at us about their patriotism and their support for the Armed Forces, casting insinuations against Labour Members. Our support of the Armed Forces is as strong and equally as determined as the Conservatives' will ever be.
When I listen to Conservatives rail at us about our lack of support for the Armed Forces, I get the impression that it is synthetic anger. They know full well that the pay agreement just announced is as much as the Armed Forces expected. The right hon. Member for Chesham and Amersham (Sir I. Gilmour) laughs, but he visits the Armed Forces probably as often as if not more than I do. If he were sincere and accurately reflected the conversations he has had with soldiers, sailors and airmen in the weeks preceding the Government's announcement, he would have got a clear message that they are saying, "We know the Government have their guidelines; we know that in this round we shall get the 10 per cent." In fact, my right hon. Friend has made it clear that they have got more than that, but that is what they were expecting. I think that the Armed Forces will be satisfied with the Government's firm commitment that comparability will be achieved at the end of the next two years.
I am never surprised by anything that the Conservatives do. They will spend virtually anything on defence or on the police, but we have heard their firm declarations time and again, month after month and year after year, that they would slash expenditure in every way—on social services, the hospitals, the schools, the roads—with the exception of defence and the police. There is a great deal of hypocrisy in this.
It is recognised that the Services feel that they have had a raw deal. But almost all sections of the community these days feel that as a result of the Government's pay policy they have had a rough deal. It is not only the Services. One finds the same feelings among engineers, nurses, hospital consultants, managing directors, and middle-range management. They all feel they have had a rough deal because of the incomes policy.
However, the sacrifices have been necessary. The news last week—and this will not cheer the Opposition—that the inflation rate has fallen below 8 per cent. makes all the sacrifice worth while.
We all recall that in the balmy days of the free for all, with everyone going for what he could get, Mr. Frank Cousins said that if there was to be a free for all, members of the TGWU were part of it. I turn that coin on the other side. If the nation is required to make a


sacrifice to get the rate of inflation down, it must be a sacrifice by all, and the Services are part of that "all". Therefore, it is not unreasonable to expect that they will make their contribution to reducing inflation. They have done so up to now, and will continue to do so for the next two years.
Why do the Opposition merely proclaim the demands for the Services and not other groups? Their reasons are obvious—

Sir Ian Gilmour: I shall answer that question by asking another question. Does the hon. Member for Gateshead, East (Mr. Conlan) know of any other group that is suffering such an exodus because it is not properly paid? Does he know another group that has fallen 32 per cent. behind what it should have?

Mr. Conlan: On the question of the exodus, I think that in making his weekend speeches on this subject the right hon. Member for Chesham and Amersham has been exaggerating. Admittedly there have been premature resignations, but, as the Secretary of State made clear, this is normal. These premature resignations represent between 25 per cent. and 30 per cent. of people leaving the Armed Forces.
It may well be that the pressures on the Armed Forces have been highlighted rather more than in the past. At least I agree with part of what the right hon. Gentleman has said. There is a great deal of discontent among the Forces. It expresses itself in complaints about pay, but I am not altogether sure that pay is the only reason for discontent.
I believe that we are getting perilously near a situation in which successive cuts in defence expenditure are affecting the teeth arms. That is due not only to this Government because it is not only this Government who have reduced defence expenditure. We all recall when the present Lord Barber was Chancellor of the Exchequer and he contributed his share to the cuts because of the economic circumstances. It is not just one Government who have been responsible for cutting defence expenditure.
As a result of economic circumstances we have had to make cuts, but we have

always attempted to protect the teeth arms, and make the cuts where they will be the least painful. By and large this has been achieved, but we are now reaching the stage where any further cuts in defence expenditure can be made only at the expense of the teeth arms.
Recently I visited Germany with the Defence and External Affairs Sub-Committee. I came across instance after instance where the troops were complaining that although they had some of the most sophisticated equipment of any modern Army, they did not have enough of it. Also there were difficulties in getting certain classes of spares. This situation had arisen directly out of successive defence cuts. If there are any further cuts they will damage that element that we must keep strong. I warn my right hon. Friend the Secretary of State that he must resist the pressures to which he will be subjected for further cuts in defence expenditure.
The right hon. Member for Chesham and Amersham and his hon. Friends have raised this issue today and in recent public speeches simply because they think that there are votes to be gained from it. They are using this exercise for political purposes. However, they will find that this political exercise, instead of strengthening the forces, will weaken them.
Service men will be encouraged by the Opposition's speeches and irresponsibility prematurely to leave the Armed Forces. Conservatives will regret the sort of speeches they have been making. We should be encouraging the forces to remain at their posts, and the Government to resist further demands for defence cuts. We should recognise that the deal that the Government are giving to the forces now is the best that can be made and is a firm commitment to 1980.

6.28 p.m.

Mr. Dennis Walters: It would be difficult to disagree with the concluding remarks of the hon. Member for Gateshead, East (Mr. Conlan). He made one point earlier on in his speech which had also been made by several hon. Members opposite about accusations from our side that Labour Members are not interested in defence. Our accusation is that some Members opposite put a very low priority on defence. My right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) singled out


particularly the Tribune Group and he had considerable and powerful evidence to back up his accusation.
The hon. Member for Huddersfield, East (Mr. Mallalieu) made a most intemperate, unjustified and thoroughly inaccurate attack on my right hon. Friend the Member for Chesham and Amersham. He also repeated the canard about the Spectator libelling the dead. There was never any question of the Spectator libelling the dead. The accusation made at the time my right hon. Friend was editor of that publication was about people who were very much alive. It was Dick Crossman who revived the issue in his book some time ago when he wrote that the original accusation had been correct and more recently it was Mr. Auberon Waugh who revived it in an article. It was not my right hon. Friend. I hope that the hon. Member for Huddersfield, East, who is a distinguished Member, will have the courtesy in due course, when he has reflected on this matter, to apologise and withdraw.
As the Regular Commission Board is situated at Westbury and the School of Infantry is at Warmingster—both in my constituency—the question of Armed Forces pay, morale, and defence in general is and has been very much on my mind. I have visited the School of Infantry on several occasions and have always come away greatly impressed by what I saw. The skill, dedication and intelligence of all those with whom I came into contact was of the highest order. The courses of the School of Infantry are attended by Service men from countries throughout the world and the school rightly enjoys a superb reputation. However, when I spoke to a cross-section of Service personnel and their wives during my most recent visit, the seriousness of the situation was dramatically brought home to me. The skill, dedication and intelligence was not any less than on previous occasions, but exasperation at the neglect that Service men had suffered from the Government had clearly reached worrying proportions and was seriously affecting morale.
The depth of feeling expressed was entirely understandable for the reasons that have been given this afternoon. Our Forces have been abominably treated in the past few years. As my right hon. Friend the Member for Chesham and

Amersham (Sir I. Gilmour) said in a previous speech and repeated today, the Forces are voting with their feet against the Government's indifference to their treatment. At Warminster I experienced the accuracy of that statement and, anyone concerned with defence could only be very preoccupied with what he heard.
Pay was not the only aspect troubling those with whom I spoke at Warminster. It was apparent that morale generally had been affected and I became aware of the fact that there was not enough ammunition, fuel and spares with which to train properly. Like all hon. Members, I hope that the recent award has done something dramatic to reverse the trend and halt the frightening exodus from the Armed Forces. However, it is my hunch that the clear and specific pledge given this afternoon by my right hon. Friend on comparability being introduced by a Conservative Government next year will do a great deal more to restore morale than anything said by the Government.
We must also bear in mind that we are dealing with intelligent people. It is hardly surprising that they are anxious and perplexed when they observe that at a time when it is beyond dispute that the armed might of the Soviet Union has been increasing in a spectacular and alarming manner our defence capability has been continuously and dangerously eroded by a Government who have given defence an intolerably low priority.
Defence cuts have done grave damage to our forces and have undermined NATO, as the secretary-general of NATO so graphically pointed out in September 1977. When we consider the state of the world we notice worrying manifestations of American isolationism. More than ever before we realise the need—

Mr. Alan Lee Williams: Does the hon. Gentleman agree that America, since President Carter came into power, has greatly increased its contribution to the North Atlantic Alliance?

Mr. Walters: Overall I believe that that is not so. The post-Vietnam neurosis, which can be seen in American reaction to events in Africa, is not encouraging and the lesson that we should draw is that Britain and Europe should develop


their defences and become increasingly self-reliant in defence. Wherever we look in the world in the spheres of defence and foreign affairs it is clear that British policy at present is weak and ineffectual. It needs a new Government to reverse the defeatist trend and to begin to put things right.

6.34 p.m.

Mr. John Cronin: I agreed with the hon. Member for Westbury (Mr. Walters) only when he referred to the American post-Vietnam neurosis. At present that is a real psychological factor in defence. There is a reluctance on the part of the United States to get itself involved in anything outside the United States. That is an unfortunate world situation.
I refer now to the speech of the right hon. Member for Chesham and Amersham (Sir I. Gilmour). I must express some gratitude to him that a Supply Day has been given for the debate. It is important that we ensure that we debate frequently conditions of service in the Armed Forces. The more frequently the House does so, within reason, the better.
I am sorry that the problems of the Armed Forces have been used for political exploitation by the Conservative Party. The right hon. Gentleman's remarks did nothing to dispel that fear. Much of what he said was irresponsible, although he did not achieve the heights of irresponsibility of the hon. Member for Stretford (Mr. Churchill) in his speech of December 1977 when we discussed the motion of the right hon. Member for Crosby (Mr. Page). However, knowing the hon. Gentleman's inability to restrain himself. I have no doubt that he will achieve the same feat this evening.
The right hon. Member for Chesham and Amersham introduced a new and extraordinary constitutional doctrine this afternoon, if I understood him aright. He seemed to say that the Chiefs of Staff had a right to publicise their views if they disagreed with the Government's policy. In so many words, that is what the right hon. Gentleman said.

Sir Ian Gilmour: Will the hon. Gentleman try to elaborate that charge? I said that the exodus was well known. The Secretary of State agreed that the information

given was not classified. I asked the right hon. Gentleman whether he would have authorised that information being given had he been asked. He did not give a clear answer. All that I am saying—and the hon. Gentleman knows this perfectly well—is that information coming out of ministries is not normally authorised by Ministers. If that were not so, Ministers would spend the whole day authorising information. What came out was largely known before. The action of the Chiefs of Staff was totally responsible and totally in the public interest. There was not one word of opinion in it. The hon. Gentleman is badly on the wrong track.

Mr. Cronin: I am glad that the right hon. Gentleman has, to some extent, cleared up the matter. I had the impression—I think that some of my hon. Friends had it—that he thought the Chiefs of Staff should give their point of view irrespective of what the Minister thought. I am glad that the right hon. Gentleman has made his view clear. Two hours ago it was far from clear. The Chiefs of Staff have no right to give any political opinions. Their only sanctions are to seek an audience with the Prime Minister or to resign. They are in the same position as the head of any Government Department.
The right hon. Gentleman tried to perpetuate the extraordinary idea that the Conservative Party is in some way the tutelary party of the Armed Forces. He tries to suggest that it always looks after their interests. That is what we always hear when the Conservative Party is in opposition. However, nobody in the Armed Forces can point to any occasion when a special benefit has been given to the forces by a Conservative Government. It may be that we shall hear more about that when the hon. Member for Stretford speaks.
The right hon. Gentleman did the usual thing of a Conservative Front Bench spokesman. He indicated that more money would be spent—this time on forces' pay. However, no indication was given from where the money would come.
I understand that it is current Conservative orthodox doctrine that any increase in expenditure may be met by cuts in Government expenditure. Presumably, the extra money spent on forces'


pay will be met by cuts in social services.

Mr. Churchill: There will be cuts in Socialism.

Mr. Cronin: What does the hon. Gentleman mean by Socialism? Cuts in what?

Mr. Churchill: £600 million steel cuts.

Mr. Cronin: The Opposition are talking of some form of proposed Government expenditure. The Conservative Party and the people who support them will not suffer any financial hardship from their proposed generosity, because it will come from Government expenditure.
Hon. Members have rightly drawn attention to the serious increase last year in applications for premature voluntary release. These figures are disturbing. We should consider them carefully. But they are not relevant to this debate. These figures will change completely as a result of the new measures announced by the Prime Minister on 25th April. It is irrelevant to quote figures showing the number of people who are seeking to leave the forces before that statement was made.
The right hon. Member for Chesham and Amersham repeatedly said that the Government should have taken action on Services pay during the last six months. We all accept that during the last six months there has been more and more information indicating that morale in the forces has been disturbed. But is the right hon. Gentleman suggesting that the Government should have taken action before receiving the report of the Armed Forces Pay Review Body? How can any responsible Government deal with such a complex and multitudinously problematic affair without having had the opinion of this specialist body? It is completely independent of the Government. Surely before any Government takes action they must consult the views of that body which was set up for that purpose. It was set up as an independent body with its own secretariat and is completely free of all Government pressure. Perhaps the right hon. Gentleman can say whether he accepts its views?

Sir Ian Gilmour: I do not blame the hon. Member for not listening to a word

of my speech, which he obviously did not. I made this clear. Of course, it is plain from the report that the Review Body would have liked to restore comparability this year. It said that the latest date should be April 1980. The body wished comparability to be restored immediately. It even gave the cost, and it is not all that expensive. Of course, I agree with what the AFPRB would have liked to have done.

Mr. Cronin: I am becoming really worried about the right hon. Gentleman because he has not even troubled to read this important document. I refer the right hon. Gentleman to paragraph 63, which states:
We consider that the balance required to bring pay fully up-to-date ought to be paid as soon as possible and, in any event, not later than 1 April 1980. Implementation of pay levels that are justified now at a date so far ahead of course implies the need to bring the levels fully up-to-date again on each occasion when a stage is implemented. It would in our view also be essential to make substantial progress towards fully up-to-date scales at the then current levels in 1979 and, if there were still an outstanding balance, to bring pay fully up-to-date at the then current levels in 1980.
That is exactly the terms of the Prime Minister's statement on 25th April.

Sir Ian Gilmour: The hon. Gentleman should read more carefully. Paragraph 60 states:
Our recommendation cannot be other than that these levels should be brought into effect at the earliest possible date.
Does the hon. Member really think that April 1980 is the earliest possible date?

Mr. Cronin: The two paragraphs must be read in conjunction. It is clear that the Review Body regards 1980 as being the date when the situation should be rectified. That is there in plain English. The right hon. Gentleman and the Opposition should not take such a severe view of the Government for putting into effect the recommendations of the body.

Sir Ian Gilmour: The hon. Member started by getting it wrong when he talked about the independence of the Review Body. In my speech I admitted that it had not been independent of pay policy under our Government. It is not independent of pay policy under the present Government. The hon. Member does not seem to realise the background against which the Review Body is working.

Mr. Cronin: I do not accept that. The Review Body accepts independent evidence. For example, it accepts the report of the Adjutant-General of the Army on pay and morale and reports from similar officers in the RAF and the Royal Navy. It gives its unbiased opinion. It is absurd to have a debate in which hon. Members attack actions of the Government which follow exactly the recommendations of the body which has been set up as an independent body to examine the matter.
It is common ground on both sides of the House that the Armed Forces have felt a real sense of grievance over the last year. But it is important that we do not consider this grievance in isolation. No section of the community can be outside the general welfare of the community. It is important to realise that the Armed Forces must be treated approximately in conformity with the Government's incomes policy. That policy has brought inflation down to single figures. Nobody can deny that. Members of the Armed Forces and their wives and families have as much interest in reducing inflation as anyone else. The Opposition seem to forget that Navy, Army and RAF wives who set out with their shopping baskets are seriously concerned about inflation. Their husbands have to pay increased bills. They have an interest in containing inflation.
Several hon. Members have spoken about morale. There is no doubt that there was some diminution of morale, but the situation has probably greatly improved as a result of the Government's measures. The hon. Member for Westbury said that he has direct access to an Army establishment in his constituency. Many hon. Members have visited Army establishments recently.
The state of morale in the Armed Forces before the Prime Minister's statement is not relevant to the debate. We should be concerned about what morale will be like in the future and what it has been like since the Prime Minister made his statement. It is difficult for us to assess this because such a short time has elapsed since the Government's policy was announced.
I have the good fortune to visit the establishment of a fighting unit twice a week. I have opportunities to talk to all ranks, from troopers to field marshals.
My impression is that since 25th April the Armed Forces realise that the Government could not give them more than they have done this year. The real grievance is that it will take two years before comparability is reached. I hope that the Government will do something more about this.
But, so far, the Government's policy has been correct. The Government have taken the views of the independent Review Body, accepted its recommendations and implemented them. That is the correct approach which is not easy to criticise unless, like the right hon. Member for Chesham and Amersham, one ignores the facts and does not read the relevant document.

Sir Ian Gilmour: Let me quote to the hon. Member what the report said:
Our recommendation cannot be other than that these levels should be brought into effect at the earliest possible date. The Prime Minister has drawn our attention to the Government's expectation that increases which exceeded the guidelines would need to be staged.
Does the hon. Member still say that the Armed Forces Pay Review Body was free to do what it wanted?

Mr. Cronin: Yes, of course. The Review Body is perfectly entitled to listen to the Prime Minister's opinion, just as it listens to the opinion of the Adjutant-General in the Army and his equivalents in the Navy and the Air Force. Listening to the views of someone else does not impair one's independence. Surely the right hon. Gentleman accepts that.
Although the Government have behaved correctly, they have not behaved generously. More could be done for the Armed Forces than has been done in conformity with the Prime Minister's statement. The Armed Forces have unquestionably suffered considerable hardship in the last year. One of the problems pointed out by my hon. Friend the Member for Huddersfield, East (Mr. Mallalieu) is that Armed Forces' pay always lags behind the pay of civilian counterparts. This gievance has persisted under Governments of both parties.
The Armed Forces should be given more than they are being given at present, and rather more quickly. There is a case for that, bearing in mind their exceptional situation and difficulties. There is no escaping the fact that we depend a great deal upon the Armed Forces. The


Army alone is preventing Northern Ireland from dissolving into a chaotic bloodbath. The Army and the Air Force in Western Germany stand between the hordes of Soviet tanks and fighting aircraft and Western Europe. The Royal Navy carries most of the burden of the defence of the sea routes to Western Europe.
I suggest to my right hon. Friend the Secretary of State that it is most important that we should bear in mind that our standards of democracy and our way of life ultimately depend upon the loyalty, efficiency and morale of the Armed Forces. I suggest, therefore, that there is a case for treating them not merely correctly and justly, as the Government have done, but also generously.

6.54 p.m.

Sir Timothy Kitson: I fully agree with the last few sentences of the hon. Member for Loughborough (Mr. Cronin). This debate must be going rather well for the Opposition because so many hon. and right hon. Labour Members have spent a good deal of their time attacking the way in which my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) presented his case. Generally, when people attack someone who has presented a case, it means that they are worried that he has deployed it too well. I felt that this afternoon my right hon. Friend deployed the Conservative Party case very successfully and probably put home a good number of shots of which Labour Members disapprove.
Like other Members of Parliament who represent constituencies that contain Service establishments, as I do with Catterick Camp and Catterick Royal Air Force station being located in the Richmond Division, I have become increasingly aware in the last two years, and particularly in the last six months, of the worry and concern expressed to me by Service men and their families about their general position. This afternoon we are discussing not only Service pay and the large exodus of Service men from all three Services but the lack of confidence and morale within the Armed Forces generally.
This is a lack of confidence not by Service men in themselves, but, as my right hon. Friend said, in the system generally. They have confidence in themselves

and in their units to do the job that we expect of them. But they are not satisfied or happy about the uncertainty that has hung over their heads for the last two years—uncertainty about their pay and pension structure, and particularly about the shortage of equipment and material with which adequately to train.
The professional pride of our Service men has been affected by limitations that we have placed upon them. They are controlled in the amount of practice they may have in using their weaponry and equipment by restrictions on spares, fuel and ammunition. For example, in Catterick there is very limited tank mileage and a limit on the number of rounds that may be fired. Some sophisticated weapons are hardly ever fired. One soldier said to me recently that he joined the Army not to clean a tank but to drive one. The severe reduction in track mileage of tanks is almost a laughing stock. Recently there has been a shortage of anti-tank rounds for training. Because of the lack of stores and the shortage of ammunition in the pipeline, it takes some time before equipment is available if some of it is found to be sub-standard.
In the last few months I have had discussions with many Service men about their pay and conditions, and it is no exaggeration to say of many young married soldiers living in Army quarters that they are only just surviving on the bread line. The hon. Member for Loughborough said that Service men and their families were concerned to see a reduction in inflation. Of course they are. He spoke of Service wives going shopping.
I am not exaggerating when I say that in Catterick Camp I have been into the houses of Service men, with wives who are unable to go out to work and children, where there has been no joint on the table for periods of up to six months, and where the only meat that is eaten is a little bit of mince once a week. Many of them have had to standardise on what they put into their shopping baskets. A milkman told me that Catterick Camp is the only place where he has to take with him an empty bottle because on certain occasions he must share two pints of milk among three families. That is how serious the situation is in some parts.
I take the example of a signalman with a wife and two children, living in a "B" type quarter on a six-year engagement and on pay band 1. His old rate of pay was £43·36 and his new rate of pay is £48·74. After income tax and deductions of £2·35 at the old rate and £3·89 at the new rate, national insurance contribution on the old rate of £2·17, and on the new rate of £2·04, with quartering charges that have not altered, his net entitlement has risen from £30·58 to £34·55. He had a rent rebates of £4·26 on the old rate but receives only £2·65 on the new rate. His child allowance has risen from £2·50 to £4·60. This means that his net total his risen from £37·70 to £41·80, an increase of £4–10. He is then £2·50 better off than if he were on the dole and social security. But if he were on social security, he would have the advantage of free prescriptions, free milk and help with his fuel bills. Even on the new rates of pay, he is not in a very satisfactory situation.
It has recently been indicated that those leaving the forces will be able to draw a pension at the fully increased figure of 30 per cent. This, of course, is morally right, but the practical effect is that the number of Service men intending to leave in early 1980 will get this pension increase now and may well decide to take it rather than wait for 18 months.
That is why what my right hon. Friend the Member for Chesham and Amersham has said this afternoon—that we intend to achieve comparability within a year—is so important. I doubt very much whether the general exodus will be slowed down in view of the 14 per cent. increase when there is a pension availability of a 30 per cent. increase taken as from now.

Mr. Mulley: I intervene to make the matter clear, because I am sure that the hon. Gentleman does not want to mislead. Obviously, as he said, it is absolutely right that the full comparability should be granted now in regard to pensions. But since there will be increases in pay next year and in 1980, those who retire in 1980 will do so at a higher pension level than those who take the current comparability without the additions that are still to come.

Sir T. Kitson: That is quite true, but men will still take the pension at the fully

increased rate now and be in a better position than they would if they had had to wait until 1980. It is quite correct that the Government have decided to pay it in full. I do not disagree with that. But that may speed up the numbers leaving the Army over the next few months. Whether the Government have done enough for Service salaries by the increases can be judged only when the numbers leaving the forces over the next six months to a year are known to Parliament.
The Secretary of State said only last week that members of the Armed Forces must not engage in public discussions and politically controversial issues. But it seems to me that if Service men do not see that their case is being argued forcefully by the Secretary of State and his junior Ministers they are bound to put forward some of their problems to others when the situation becomes as serious as I believe it has done over the last few months.
It is because of the lack of leadership by the Ministers that senior Service officers and others have been commenting in what I believe is an unprecedented way over recent weeks and months. The Secretary of State has a great deal of responsibility to bear for the present situation. When he last gave an increase of pay to Service men, he took most of the increase away by increasing charges for their quarters and food. Until this year, over a period of some two years, they have had little or no increase, and I believe that the reduction in taxation in this year's Budget will do almost as much to assist them as the pay increase that has been announced.
One particularly depressing factor has been the way that the Minister seems to have avoided getting involved in these problems. Catterick Camp is the second largest military esablishment in the United Kingdom. Some 8,500 uniformed troops are stationed there. With wives, families and civilian back-up, some 24,000 people are on the camp. Yet neither the Secretary of State nor the Minister of State, nor the Under-Secretary of State for Defence for the Army could find the time to visit them in the last 18 months. I encouraged the Secretary of State or one of his Ministers to come, as my right hon Friend mentioned, on several occasions. We are still waiting.
We should be foolish if we did not recognise the fall in the morale of our forces. We should be foolish if we thought that the recent awards would overcome all of their present difficulties. We should be foolish if we did not recognise that a lot of the problem is the responsibility of the Secretary of State himself. It is for that reason that I have no hesitation in supporting the motion.

7.4 p.m.

Mr. Doug Hoyle: Because of some of the things that I shall be saying a little later, I had better declare an interest as the president of the Association of Scientific, Technical and Managerial Staffs.
Listening to the debate, I was rather sad in two respects. This may well be the last occasion on which we shall hear speeches from the hon. and gallant Member for Eye (Sir H. Harrison) and from my hon.—and gallant—Friend the Member for Huddersfield, East (Mr. Mallalieu). I think that we shall miss them greatly in the House. Whatever has been said today in a partisan fashion, there is no doubt whatsoever that over the years both of them have made their contributions with the well-being of all the people in the Services in mind. I thank them both very much for what they have done.
Having said that, I shall now completely disagree with everything that has been said in the debate. There has been an awful lot of sham fighting this evening. We have heard cries from the Opposition. The Secretary of State was quite right to say that if by some mischance—though I do not think there is any danger of this at all—the Opposition were to come to office, they would not be found to be champions of the Armed Services, as they have been posing today. I think that we should find them guilty of not carrying out some of the words that they have uttered today.
Members of the Armed Forces have been victims of the pay policy along with many sections of the population. As one who does not believe in pay policy—not many hon. Members, on either side of the House, can say that—I can truthfully say that it makes some very harsh cases. That is one reason why I do not believe that there is any substitute for free collective bargaining. I do not think that there is any other way in which one can get around this problem.
I know that it does not find favour in certain quarters, but I shall continue to say this until common sense dawns on some members of some Government—that this is the right way forward.
I shall now say something else that will not be very popular with many hon. Members who have spoken in the debate. I think that the Review Body is a thing of the past rather than something of the future. It has served its time. It has pointed the way on many occasions. It has many well-meaning members. Many of them are very elderly, but they are well meaning, nevertheless. They have produced a report that shows up deficiencies. However, I do not believe that this is the right way to go forward. Nor is it the direction that we should be following.

Mr. Hooson: Will the hon. Member explain to the House how he would get free collective bargaining in the Armed Forces and what would happen if they did not agree?

Mr. Hoyle: I shall be doing just that. I know that the hon. and learned Member will give me time. If he wants to come back on the matter later, so be it.
I think that the pay of the Forces should reflect three things. First, it should be high enough to retain people in the Forces. That is quite obvious. Many hon. Members have pointed to the deficiency that people are leaving the Forces in great numbers at present.
Secondly, I think that it should reflect the comparable rates in civilian life. It is far easier now to move across because many of the jobs done in the Armed Forces have an equivalent in civilian life.
Thirdly, pay should be high enough to take into account the special features of forces life. The danger element, for instance, has been referred to as part of the X factor.
All these considerations must be taken into account. I believe that the only way in which we shall be able to do that is by having professional negotiators—not the Review Body—working on behalf of the Armed Forces. The professional negotiators to whom I shall be referring are mostly the trade unions. They are the people who have the members in civilian life and who can see what the comparable rates are and the amounts that members of the Armed Forces ought to be paid. In moving to free collective


bargaining we may be able to get that kind of cross reference. I do not think that we shall be able to get it in any other way. In any other way, the forces will continue to lag behind.
It is not only in rates of pay that the trade unions are needed in the Armed Forces. They are needed in every aspect of pay and conditions. They are needed if only to draw up disciplinary and appeals procedures in which they are expert in civilian life. That would bring democracy into the Armed Forces and safeguard personnel against unfair and arbitrary decisions. They would be able to have professional representation at all stages. At a court martial, they would be able to have not only a trade union officer to represent them, but someone to represent them legally.

Mr. David Walder: Is the hon. Gentleman under the impression that soldiers before courts martial cannot be legally represented?

Mr. Hoyle: The hon. Gentleman knows that I am well aware that they can. I am saying that we should bring in independent expertise, covering many fields outside as well as within the Armed Services.

Mr. Alan Lee Williams: Does my hon. Friend agree that there is a political danger here? His trade union is, rightly, affiliated to the TUC and close to the Labour Party. Would it not be highly dangerous for the Armed Forces to be represented by a union with such close political associations?

Mr. Hoyle: No, I do not agree with my hon. Friend, although I always respect his views. I have always realised, for instance, that the forces would not be free to pay the political levy. If we followed the example of unions in other NATO forces, they would not have the right to strike. That would make them different from the people in civilian life for whom we are accustomed to bargain. But, with those restrictions, they would benefit greatly from the expertise of union such as mine and many others.
There are unions now representing the Civil Service, including top civil servants. They are also interested in recruitment in the Armed Services. A number of unions would be competing which are

accustomed to the kind of safeguards for which my hon. Friend asks. I do not know why—it always rouses Tory anger when I say this—other NATO countries can have unions to represent their armed services but the idea is considered the last thing that we should have in this country.
I believe that one of the main objections is to the effect of the unions on discipline. But how is that coped with—and very adequately coped with—in Holland, West Germany, Belgium, Denmark, Norway and Luxembourg, which all have trade unions—and with an identity of membership higher than is achieved in civilian life?
A survey in 1977 by the American Federation of Government Employees looked into unions in the forces in Europe. It found that the unions concerned
confine their activities to matters of compensation and conditions of service and avoid involvement in larger political issues.
The survey felt that the unions improved internal communications and morale—something that we have discussed tonight. It said that they
created a more democratic and enlightened form of service and … improved the attractiveness of a military career.
I concluded that, although bringing in democracy in this way is a major challenge to the leadership of the Armed Forces.
there is no other choice if motivation and discipline are to be maintained in today's army".
If that can happen with our NATO allies, why can it not happen in this country? Why does the idea arouse such resentment?

Mr. Robert Banks: Does not the hon. Gentleman recognise that there is no evidence whatsoever that the members of the Armed Forces want to join trade unions and that this is the key to this matter? The divisional system in our Armed Forces provides for a free expression and representation to be transmitted through to the Service chiefs. The problem with this Government is that the Prime Minister refused to listen to the Service chiefs when they called to see him.

Mr. Hoyle: The hon. Member is confusing several things. First, he says that there is no demand. How does he know,


when the unions are not allowed to recruit—

Mr. Banks: Ask the Services.

Mr. Hoyle: We will ask them. If we were given the opportunity, I am sure that many people would be recruited into unions. Many people have written to us expressing an interest, and we have some members in the Armed Forces at the moment. My view is as good as that of the hon. Member, and I believe that if we had the chance we should find that many members of the Forces wished to join.
My criticism of the Review Body is that it deals only with ranks below major-general. What an archaic system. Surely there should be an input from the Armed Forces themselves. My hon. Friend the Member for Huddersfield, East accepted that there might be a role on the Review Body for serving soldiers—he had lieutenant-colonels and majors in mind as possible members. I would take it one step further and allow bargaining for these people as we do for others in a democratic society. There is nothing wrong with that. I can see no objection when top civil servants in the Ministry of Defence are members of a union affiliated to the TUC.
There is no comparison between our rates of pay and those of the forces of countries that allow unions. A private here, without the present increase, gets about £52 a week. In West Germany, he would get £76, in Norway £102 and in Denmark £122. A staff sergeant in this country would get £84, before the increases; in West Germany, he would get £108, in Luxembourg £115 and in Denmark £139. A commissioned officer or lieutenant would get £77 here, £120 in Belgium, £165 in Luxembourg and £164 in Denmark. All those countries allow unions. The hon. Member for Stretford (Mr. Churchill) smiles at that. I thought that he was a friend of the forces and wanted them to have more pay. When he is told how that can be achieved through collective bargaining he sneers. As I said earlier, the Tories are engaging in a lot of sham fighting. They are trying to stir up sympathy for their point of view without being prepared to do anything for the Armed Forces.
Not only would the Colonel Blimps in their wheelchairs be startled at the suggestions

that trade unions were to be introduced into the Services, but it would be a challenge to the established order in the Forces and to the present structure. However, we should be bringing in a measure of democracy—democracy that is now being denied to Service personnel. It is a challenge that will have to be faced, if not now, at some time in the future. The challenge will not go away. I believe that the demand to be represented by trade unions will grow. But the sooner that is realised the better.
In conclusion, I wish to quote the words of a West German army sergeant, who, incidentally, is a trade union member. He said:
In a democratic country an Army which rejects the concept of democratic thought is itself a threat to democracy.

7.22 p.m.

Mr. Peter Viggers: The Opposition are censuring the Secretary of State for Defence because he allowed Service pay to fall so badly behind. I support the motion for that reason.
There are many ways in which the world has changed around the Armed Forces, leaving them in a position where their rates of pay for the job they do is no longer defensible. The increase of pay will not take place for some time, and a large number of people have been allowed by the Secretary of State for Defence and other Ministers to lose out because of the delay in bringing in an uprating of pay levels. Those who retired through to March 1978 have retired on pensions which are 32 per cent. behind the rate they should be. This is now admitted by the Government. Those personnel have been permanently damaged because their pensions will also reflect a diminution in pay. There is nothing we can now do to put that situation right because the Government have allowed it to happen.
Similarly, local overseas allowances have not been reviewed since November 1976. May I give an example as related to Service men in Gibraltar? Service men's local overseas allowances there have remained static since November 1976, whereas civilians working there with them have seen the foreign service allowance increased by anything from 50 per cent. to 84 per cent. Moreover, civil servants who are on foreign service allowance for


some reason that remains incomprehensible to me receive London weighting for working in Gibraltar. That is a straight comparison, and the Secretary of State for Defence is guilty in not allowing his personnel to benefit from increases enjoyed by civil servants in Gibraltar.
If I may follow the theme of showing the way in which the world has changed around Service men, I emphasise that many people joined the Services thinking that they would enjoy travel and the opportunity of carrying out a variety of tasks. However, the personnel serving in the Royal Navy now see their role restricted to serving in Rosyth, Faslane, Plymouth, Portsmouth or Chatham. They have lost one of the main reasons for which they joined the Service, namely, the concept of the challenge of travel and a varied life.
Service men have been left behind in another area through a change in domestic circumstances. Many people in the Royal Navy have been helped by the long service advance of pay to enable them to buy their own homes, but they have found that when they have bought their own homes and wish to move to take up married quarters after posting to another establishment the amount they receive from letting their houses is taxed at the unearned income rate and that the net amount they receive as a result of letting their houses is not sufficient to enable them to pay the cost of their married quarters.
I am not suggesting that it is the Secretary of State for Defence who has brought about this anomaly, but the situation has evolved and the Government should have taken cognisance of the fact that Service men are losing out in this way.
Service men of all ranks have an opportunity to receive educational grants and boarding allowances to enable them to board out their children. Many Service men take advantage of them. If the Minister thinks that it is only the officers who take advantage of this necessary benefit in a Service career, I refer him to a gentleman in my constituency, a sergeant, who had four children at boarding school. These benefits in educational grants are paid in the form of a grossing up. The result is that an individual officer or man in the Services has the

grossed-up amount of educational benefit added to his total income. When that is added to the unearned income he receives by letting his house, one finds that the most modest ranks can be taxed at astronomical rates.
I was given an example involving a Royal Navy commander who was taxed on the assumption that he was receiving about £15,000 a year, because his educational grant was added gross to his income. Furthermore, a sergeant or corporal can find that he is being taxed at the highest rates because of the grossing up of the educational grant. This means that the wife of the sergeant or corporal will need to work to supplement his income. The "Catch 22" situation then arises because the wife's income is also added to the grossed-up amount of income. The result is that the net income to the family is very small.
These issues are not matters for which the Government are directly responsible, but the Government should take cognisance of these facts and their consequent effect on Service men's pay.
It is important that we should not underestimate the extent to which the Services care deeply about the use of ships, aircraft and military exercises and the other effects of defence cut after defence cut. People do not join the Services because it is just another job. They join because they believe that defence is important and that the role should be carried out effectively.
Although I believe morale to be extremely high, it has been damaged by defence cuts which have restricted the level at which ships can be used and the speed at which they can steam. Defence cuts have restricted the amount of operational activity given to the aircraft in the RAF. They have also reduced the amount of money which may be spent on the military exercises which are so necessary to enable the forces to keep in trim.
Even the decision not to proceed with the neutron bomb has had some effect on morale. There is a feeling that the saddest and most feeble boast of all was that the defence cuts were to be in the tail rather than in the teeth of defence. The final result of this category of disadvantages which have been suffered by the Services is that recruiting is now abysmal and that departures from the Services are


worrying and will undoubtedly increase because of the enhanced pensions that are now available. Those concerned may well feel that they will take advantage of those pensions now rather than in a year or two.
The role of the Services has remained the same in a changing world, but the Service men have been hit by inflation, tax rates, Rent Acts and pay policy. All have conspired to damage their interest. The Armed Services feel that their service is taken for granted, and the evidence supports that view. There is a growing feeling that the authentic voice of many in the Labour Party is that of the hon. Member for Nelson and Colne (Mr. Hoyle).

Mr. Robert Mellish: No, it is not.

Mr. Viggers: There is a growing feeling in the Services that the Government would be prepared to see a growth of trade union activity in the Services.

Mr. Hoyle: Why not?

Mr. Viggers: I assure the hon. Member for Nelson and Colne—and I base my view on hundreds of conversations with Service personnel—that the last thing they wish to see is the Socialists press-ganging them into trade unions. They feel that the Government have a special duty to do right by their most loyal servants in the Armed Forces. The Secretary of State and his ministerial colleagues should ensure that the Services are fairly treated. In my view, they have failed to do so, and for that reason I happily support the motion.

7.30 p.m.

Mr. Michael Stewart: I have listened with great interest to the speech of the hon. Member for Gosport (Mr. Viggers). I hope that the Government spokesman will carefully consider particularly the points made by the hon. Member about the effect of income tax, educational allowances and so on. I noticed the point that he made about the general effect on morale of the total amount of money which the nation is prepared to devote to defence and the effect that that has on the use of weapons. I shall say something about that later.
I comment on what was said about the independence of the Review Body. It is

the job of the Review Body, having gone through the process of job evaluation, allowed for the X factor and taken all the relevant considerations into account, to decide what ought to be the level of pay for the Armed Forces. The Review Body does that independently. The figure that it arrives at and which is in its report is the figure that is believed to be the right one on the premises from which it starts—the job evaluation, the X factor, and so on. It is not the figure which the Government necessarily wanted or a figure suggested to the Review Body by the Government. It is the Review Body's own independent judgment.
The Government inescapably come in at this point: "Granted that that is the figure that we want, how soon do we get there?". No Government would say or ever have said to an independent body that such a body should not only tell the Government the figure but order them to implement it at a certain point. No responsible Government could hand away that degree of their authority.
The present Government have decided to reach that figure in 1980, which is the last date that the Review Body mentioned. The Government are not flouting the Review Body. They are using, I admit, the maximum amount of latitude given to them by the Review Body, but they are within that latitude. The argument of the Conservative Party is that we should reach the Review Body's figures of pay earlier than 1980. It has not specified how much earlier. The impression created is that the Conservative Party thinks that the process of getting to the Review Body's figures should be complete by 1979 rather than by 1980. We are arguing about a year's difference. I am not sure that that merits all the vituperation in the speech of the right hon. Member for Chesham and Amersham (Sir I. Gilmour).
There are one or two reasons why the Conservative Party is not in a strong position to argue that the date should be brought forward. The first is that at the moment the Conservative Party is arguing for treatment that will help the Armed Forces, but not long ago, during the firemen's strike, the leader of the Conservative Party said that the firemen should be treated as a special case and given more than a 10 per cent. settlement, which


amounted to encouragement to them to prolong the dispute.
If the Conservative Party, when it feels that there is a popular cry, is always to say that a particular group ought to have more, we shall not have a responsible Government. The Conservative Party ought to learn a greater sense of responsibility before it demands that the Government should reach these figures in 1979 instead of 1980.

Mr. Julian Critchley: If that is true, why did not the right hon. Gentleman, as a Minister, and others of his colleagues in the early 1970s, support phases 1 and 2?

Mr. Stewart: I was not a Minister in the early 1970s. I ceased to be a Minister in 1970. One of the pleasures of not being a Minister is that one has a greater freedom in what one can say on a number of matters. The Government which came into power in 1970 pursued, in matters other than pay, a policy which systematically benefited better-off people. They were not, therefore, in a position to make an appeal for national unity. That is true over and over again with Conservative Governments.
A further reason why the Conservative Party is not in a strong position to press for the figures to be reached by 1979 is its general attitude towards pay policy. We have been told recently that the Conservative Party does not approve of incomes policies in general but that any Government must have some sort of policy towards the pay of its employees. That is the latest pronouncement of the Conservative view on pay policy.
What does that mean? It means that if there is any difficulty in reconciling all the total demands for wages with what the national economy can afford it will be the public employees who will suffer. Now the Conservative Party has told us that the Armed Forces must not suffer, nor the firemen, nor the police. That means that nurses and cleaners and Government Departments will have a pretty thin time, and it will arouse considerable bitterness—which, above all, we want to avoid—between the Armed Forces and the other public services. The Conservative Party must think out its pay policy more clearly before beginning to demand special treatment for those in the Armed Forces.
The Conservative Party's third unanswered question is that if we are to spend more on pay for the Armed Forces and, as the Conservative Party is arguing, more on defence generally, where is it to come from? That is not an unanswerable question. I shall have a suggestion to make about it later. We have not yet had an answer from the Conservative Party. There is the answer "Cut the social services." That means that the money has to come from those of our fellow citizens who are less well off because they have greater need to use the social services. That will not do. It is not the way to get a united nation in improving the national defence.
The hon. Member for Stretford (Mr. Churchill) always says that we should do it by stopping Socialism. When he was pressed today, he mentioned the steel industry. If the Government were spending less in helping the steel industry than they are, the steel industry, which, like steel industries all over the world, is in great difficulty, would have to be cut in size far more drastically than it has been cut. I do not believe that drastically cutting the steel industry is a recipe for a more secure national defence. I know that it is a large sum of money that is involved, but it is not an answer to the question of paying for defence.

Mr. Eldon Griffiths: What is the right hon. Gentleman's view on giving orders to the steel industry for weapons, particularly tanks and frigates? Surely that would be beneficial to the steel industry, apart from simply giving it subsidies to close works.

Mr. Stewart: I think that the hon. Gentleman will agree that even then the steel industry will expect to be paid for what it makes. Surely there will still be the question of where the money is to come from. More money will be spent in that way than on having to subsidise it.

Mr. Eldon Griffiths: We would get something for it.

Mr. Stewart: Yes, but we would still spend more. There is still the question of finding it. I shall make a suggestion about that which is more socially just than what usually comes from the Conservative Party and more sense than usually comes from the hon. Member for Stretford.
My hon. Friend the Member for Huddersfield, East (Mr. Mallalieu) was right in saying that the X factor ought to take into account the fact that civilian pay is increased by wages drift and productivity agreements in a way that the pay of the Armed Forces cannot be increased. He urged that there should be representatives of the junior officer ranks on the Review Body. My hon. Friend the Member for Horn-church (Mr. Williams) extended that argument to other ranks as well.
During the last war and for a period afterwards the Army had to deal with the bitterly contested question of in what circumstances a man on active service overseas could be given compassionate leave. As might be expected, the number of requests for compassionate leave was much greater than the number that could be granted. A committee on which all ranks were represented was established to evaluate the different claims, and it worked extremely well. The suggestions of my hon. Friends the Members for Huddersfield, East and Hornchurch in regard to the composition of the Review Body need to be looked at.
I must confess that my hon. Friend the Member for Nelson and Colne (Mr. Hoyle) does not convince me that the right answer is to have a trade union in the Armed Forces. I have not thought out how it is to be done, but I am certain that there ought to be closer contact between those who are concerned with Army pay and the trade union movement as a whole.
There is always a danger that the feeling will grow up in the Armed Forces that men in civilian life have it easy and that they have only to threaten to strike and they get all they demand. Of course, that is not true, but it can be believed and some of the remarks of Conservative Members about miners and Ford workers give colour to that view. If men in the forces knew more about what trade union bargaining is really like, that would help towards a better understanding.
Conversely, there is sometimes among civilian workers a failure to understand the value to the nation and the great difficulties and dangers of work in the Armed Forces. It would be useful for

men with experience in the civilian trade union world to have a closer contact with men who know what life is like in the Armed Forces. I throw that half-formed suggestion to the Government as an idea that is worth consideration. There is more chance of progress on those lines than in trying to form the Armed Forces into trade unions.
I have been giving thought to the question how we are to pay for the increased expenditure on defence—including forces' pay and equipment—that is needed to help with morale and the national defence. I have been concerned about what has happened to defence budgets in the 1970s, not only under this Government, but their Conservative predecessors.
We may have to consider an increase in expenditure on defence, but this must be done in a way that makes clear to everyone that the whole nation is in this. We cannot do it by restricting the growth of social services much more because those who rely most heavily on them have already borne their share of difficulty—as is shown in many of the letters in our postbags. We cannot ask too much of the civilian wage earner because, for the most part, he has been observing the pay policy of the Government with great self-restraint. He has been right to do so, but it has required a degree of effort on his part.
We must, therefore, bring in the better-off sections of the community. That is why, incidentally, I believe that it was a mistake to take a penny off the standard rate of income tax, but that is another story.
If we are really concerned about defence, could we not consider an idea adopted for a short time many years ago by the Conservative Government of a special national defence contribution? A citizen with a post-tax income of, say, £5,000 a year would be the starting point for the contribution and my formula would be to take the number of thousands of pounds in a person's income, square it and multiply the result by four. For a man with an income of £5,000, that formula would produce a contribution of £100—five times five equals 25, four times 25 equals 100. A man with an income of £10,000 would pay £400 and a man with £20,000 a year income would pay £1,600.
The Treasury would have to get to work to see how much these contributions would bring in. It might be quite a lot, certainly at least enough to advance the Review Body's recommendations by one year.
That formula would not be asking for an intolerable sacrifice. If we say that there is a need to look at the nation's defence, but claim that such a formula would be a dreadful check on incentives and that we cannot expect people to save, invest and organise industries well if we tax them in this way, we can pack up any idea of making a serious national defence effort. This should be something that every taxpayer should decide to meet not by saving less but by deliberately denying himself things. That is what a real effort for national defence means.
The Opposition may not agree with my figures—I accept that they need to be examined in detail—but unless they are prepared to support some such scheme, all their talk about more expenditure on Army pay or other defence matters will completely lack credibility.

7.46 p.m.

Mr. Iain MacCormick: When I came to the House today, I was at least disposed to advise my hon. Friends to support the Leader of the Opposition's motion. But, having heard the speech of the right hon. Member for Chesham and Amersham (Sir I. Gilmour), I am extremely disappointed. The right hon. Gentleman had the opportunity of presenting a positive case in favour of those who man our Armed Forces, but he took a mean alternative course of attacking the Tribune Group of the Labour Party and trying to bring discredit on the whole Government side of the House. That was a mean effort, but many of the following speeches, even those from the Conservative Benches, have been much more positive and thoughtful.
I advise the right hon. Member to look at some of the remarks of the hon. Member for Huddersfield, East (Mr. Mallalieu). One of the most telling things that the hon. Gentleman said was that we must be careful in debates relating to defence to distinguish between debates on the whole policy underlying our defence structure and debates such as this which have to do with the payment of those who have to put into operation the policies

decided, legitimately, in the political hurly-burly of the House.
This is not one of those occasions, because we are speaking only about the payment of a complete cross-section of the British nation, ranging from brigadiers to privates. It is a matter that should be debated and decided without the rancour that was definitely associated with the speech of the right hon. Member for Chesham and Amersham.

Mr. Churchill: Possibly the hon. Gentleman missed the important positive statement of my right hon. Friend to the effect that the next Conservative Government will grant full comparability of pay to the Armed Forces in 1979, not in 1980.

Mr. MacCormick: The right hon. Gentleman referred to the post-dated cheque that the Government are offering and to his own post-dated cheque of a rather different date. I shall return to that shortly.
I was about to say that any Member representing a Scottish constituency has a special right to speak on the whole subject of the remuneration of our Services since Scotland has made so great a contribution, especially in personnel, to all the Services. Indeed, not only has Scotland made that contribution in personnel but it has made a contribution also, albeit perforce, in the provision of such unpopular facilities as the nuclear submarine base and so on.
We in Scotland often feel—I am sure that this applies to Members of all parties who represent Scottish constituencies—that the contributions which we make are not altogether balanced or fairly balanced by what we get back. For example—I have said this previously in the House—the level of defence expenditure in Scotland is unfairly low and always has been. We wonder about the future of the dockyard at Rosyth. We wonder whether in years to come it will maintain its present position in the Royal Navy. We wonder also about the dispersal of jobs in the Ministry of Defence, which is all part and parcel of what one can fairly expect to get back from the great contribution which we in Scotland have always made.
I shall not take much longer because, as I said at the outset, I regard this as a relatively simple matter, although it is of


the utmost importance to those who serve in the Armed Forces. The chairman of the district council which lies in the constituency which I have the honour to represent has just come back from visiting the Argyll and Sutherland Highlanders in Germany, and he tells me that there is grave unrest among certain of the soldiers there about their conditions. Clearly, the Argylls form a regiment which has always in the past—as it always will—served the country without allowing such conditions to affect the effort through which it expresses its loyalty, but one cannot but be concerned when one hears such reports.
I was shocked to read in The Scotsman last year that 120 privates and lance-corporals serving at that time in Edinburgh had to be recipients of rent and rate rebates. I have always felt that, should we ever reach such a state of affairs, we ought to take immediate steps to ensure that it stopped and that such a situation never occurred again.
Although 100 years ago we should have regarded ourselves as living in the greatest empire in the world and as citizens of the greatest Power in the world, and at that time we were prepared to accept or were able to accept into our forces people not very high in the scale of intelligence, now that we are a secondary Power, with the threat against us much greater, we must have Service men who are certainly not at the lower end of the intelligence scale—men who are, at the very least, blue-collar workers in terms of the expertise needed to operate the equipment with which the Army and the other Services are now supplied. In these circumstances, we must ensure that the reward which such Service men receive is comparable with the effort, education and skills which they deploy in our defence.
At the outset of my speech, I expressed my deep disappointment at the way in which the Front-Bench Opposition spokesman presented his argument. Nevertheless, I am convinced that what my right hon. Friend the Member for Western Isles (Mr. Stewart) said on 25th April still holds good. He said that if the Armed Forces had fallen behind, they should be paid now, and he added:

the Armed Forces and, indeed, the police as well, should be outside the restraints of incomes policy."—[Official Report, 25th April 1978; Vol. 948, c. 1183.]
Notwithstanding what several hon. Members on the Government Benches have said about trade union representation, I go along with the opinion of the hon. Member for Huddersfield, East that we in the House of Commons are the trade union representatives, the shop stewards, of the Armed Forces. My advice to my hon. Friends must remain that we support the motion tonight.

7.54 p.m.

Mr. Julian Critchley: The right hon. Member for Fulham (Mr. Stewart) was both right and reasonable to raise the question how the Conservative Party, when it forms the Government in October, will find the money for additional defence expenditure. We are committed to more money, more quickly, for Service pay. We are committed to an increase in defence expenditure anyway. We have to consider the problem of finding a replacement for Polaris. We have to decide whether we shall replace it, and if we do replace it that will mean additional expense. Clearly, therefore, the right hon. Gentleman has raised a reasonable though rather difficult subject, and I shall make one or two suggestions in that respect.
It should be said, first, that if we are to increase defence expenditure, we must explain to the country at large why it is necessary. The threat has to be explained, and explained reasonably. As I am sure the right hon. Gentleman will acknowledge, it is a growing threat. That is the first part of the process.
The second part of the process is obvious but more difficult. We have to get the economy moving again, for unless we can do precisely that our defence effort will be less effective than we would wish.
I suppose that as the trade unions have become the strongest estate of the realm, there is therefore a sinister logic behind the argument of those who advocate that the Armed Services should become unionised. But I believe that the great majority of hon. Members on both sides devoutly hope that the Armed Services have not become so weakened as to fall victim to the ambitions of the hon. Member for Nelson and Colne (Mr. Hoyle).
One of the disadvantages of middle life—and there are many—is that things are not what they used to be. I think that this is equally true of speeches in the House, although, to be fair, the speech of the Secretary of State was every bit as eloquent this afternoon as I remember it to have been in the past. But where I find a falling off in the standard is in the speeches by the representative of the Liberal Party who is instructed to speak upon defence.

Mr. Patrick Wall: Where is the Liberal Party?

Mr. Critchley: The hon. and learned Member for Montgomery (Mr. Hooson) is not here at the moment, but, with any luck, he may return. It was not so long ago that the Liberal defence spokesman was the hon. Member for Inverness (Mr. Johnston), and his speeches were written with the help of the professor of international relations at the University of Surrey. The combination was really quite good. The speeches were invigorating, they presented an independent point of view, and they were always worth listening to. I do not think that the hon. Member for Inverness would have slavishly followed the Lib-Lab pact were he in the position now held by the hon. and learned Member for Montgomery, whose speech writer, unfortunately, is not the professor of international relations at the University of Surrey.
I wish briefly to widen the debate, not because Service pay and remuneration are unimportant but because that subject is related to other perhaps equally important, or more important, matters. Clearly, in recent years there has been a weakening of our forces in numbers and in morale. As to numbers, the reduction can be demonstrated. The Armed Forces and their civil servants are 51,000 fewer in number than they were in 1975. It is more difficult to prove an assertion that morale has fallen, but as the Member for Aldershot I am in contact with the Armed Forces and I fear that I have to say that morale has fallen considerably.
Over and above the reduction of numbers and the fall in morale, there is also the whole litany of defeat, as it were—shortage of ammunition, of spares, of fuel and of money for exercises, with expenditure cuts, actual or planned, of

about £9,000 million over a decade—and all happening at a time when Soviet rearmament is growing apace. In fact, there is no obvious ceiling or limit to the whole process of Soviet rearmament, and it is this, I think, which is the most important fact of international life, because Soviet rearmament has, or should have, obliged us to examine NATO's strategy once again, in one last attempt, perhaps, to get it right.
NATO strategy, relying as it does upon early warning, is still based on the notion of the long war. Here is our dilemma. On the one hand we see the growth of the Soviet submarine fleet and its menace. The logic of that is that the Soviets would wish to fight a relatively long war to starve us out. On the other hand, there is Soviet rearmament in Central Europe, redeployment of the Soviet air force, re-equipment and so on, which argue very strongly for a short war. Clearly, the West must budget against each eventuality. Here is one of our many dilemmas.
But with the recasting of Soviet forces the warning time in Central Europe of an attack has dropped as low as 48 hours, according to General Haig. That is the minimum warning time. It means that preparation time, assuming that the politicians are prepared to give the authority necessary to reinforce and deploy forward, is now virtually non-existent.
We are now faced, for the first time I believe, with the spectre of a Soviet surprise attack. Surprise is a paramount principle of war. If we briefly examine the historical examples of surprise in the 20th century alone, we begin to extract from those examples lessons that are very sinister in their implications for today.
For example, these are assumptions that were fed into the general staffs and the leaderships of various countries at various times. In 1940 the French General Staff believed that the Ardennes was hopeless for the use of armoured vehicles. That assumption was fed into the French General Staff.
My next example is the Soviet Union in 1941. Stalin refused to believe all the evidence that the Germans were about to launch a war against the Soviet Union. Why did he refuse to believe the evidence from our own intelligence services, the United States intelligence services and, most important of all, his own? He did


so because as a good Marxist he felt that Hitler, a rational human being, would not start one war before he had finished another. Therefore, all the evidence that was reaching the Soviet Union of the German attack was dismissed by Stalin on the ground that the West was muddying the water between the Soviet Union and its German ally. The assumption fed into the machine was that no rational human being would start one war before he had finished another.
My third example—and there are many—is the Arab-Israeli War of 1973, the Yom Kippur war. Here the assumption fed into the Israeli Cabinet was that the Egyptians would not attack the Israelis until and unless they had achieved air superiority. Thus, all the evidence coming from Israeli intelligence and from American satellites of Egyptian movement forward was regarded as yet another Egyptian exercise, or was dismissed by the Israelis on the grounds that the Arabs did not have air superiority.
Another example is 7th December 1941, Japan's attack on Pearl Harbour. For a year and a half the Americans had read all the codes that the Japanese sent to their embassies throughout the world. Despite the fact that they could read all diplomatic communications, they still got it wrong. They were right, in that they saw an attack by Japan happening within the week of 1st December to 8th December, but the conclusion that Washington reached was that the Japanese attack would be against the British and the Dutch and not against themselves.
Therefore, with that assumption fed into the American machine, the Americans were compelled to accept the first blow at Pearl Harbour and the destruction of the Pacific fleet. It was only by tremendously good fortune that the American aircraft carrier squadron was at sea and not in Pearl Harbour when the Japanese struck.
More modern, and perhaps more relevant, is the example of 1968, the Soviet invasion of Czechoslovakia. As NATO has no intelligence service of its own and has to depend upon national intelligence services for its information, the NATO Council found itself having to choose between a report of the CIA, which said that the Soviets would not invade Czechoslovakia, and a report of our intelligence which said that they would.

The NATO Council picked the CIA report, and was caught with its trousers down. This was clearly another preconception, another assumption, fed into the machine.
The only time in recent years when something has happened which has surprised everybody and for which there was no advance warning was on 13th August 1961, the building of the Berlin Wall. There was no advance information to any intelligence service in the West that that was about to happen. But that is exceptional. In every other example there was no shortage of information. The warning is always there. What happens is that it is filtered out through the preconceptions of the people who happen to be watching.
If the questions about the possibility of war in Central Europe were to be posed in this House, the answer of perhaps all of us would be that war in Europe was unthinkable, despite the fact that in Central Europe there is the greatest concentration of armed force that has ever been seen. Yet that assumption, that war in Europe is unthinkable, is still being fed into our machine and is the assumption which may block our own decision-makers from understanding warning when it comes.
As Soviet strength increases, so NATO has come increasingly to rely on reserves and reinforcements. Their activation must depend on adequate warning, but will the warning ever be acted on in time? We can no longer expect a slow build-up of crisis, a stately process leading to a declaration of war. The last time war was declared as such was 8th December 1941, when the British Government declared war on Japan. The next war, if it happens, will be undeclared.

Mr. Michael Stewart: I am trying with some difficulty to follow the hon. Gentleman all around the world. I think that he said that Stalin made the mistake of not believing reports that he received because he was a good Marxist. The hon. Gentleman subsequently pointed out that the same mistake was made by the American Government, the Israeli Government, and the NATO Council. Were they all Marxists?

Mr. Critchley: I should hate to have to go through all my examples again. I refuse to yield to that temptation. The right hon. Gentleman clearly failed to


understand the distinction in what I was trying to describe. In each case the result was the same, but the reasons were different.
If the next war is to be undeclared and there is to be no stately process towards declaration of war, how will it be fought? Clearly, it will be fought in three stages in Central Europe. It will be fought first as a holding operation, with the light screen of armoured cavalry supposedly there to hold the Soviet attack, which will withdraw quickly.
The second stage will be the major battle fought with conventional weapons. Were that major battle to be lost by NATO, then and only than would the NATO Council consider whether to introduce into the battle battlefield nuclear weapons. That is the pattern under "flexible response" whereby the war would be fought.
It is crazy to assume that the weaker of the two sides will necessarily win stage 2, the major battle. The West must be prepared to use its tactical nuclear weapons not simply first, which we would be prepared to do now, but first and early rather than first and late. It is no good introducing tactical nuclear weapons into a battlefield which is already lost.

Mr. Wall: I follow my hon. Friend's thesis. I entirely agree with him. Would he not agree, however, that there are two alternative scenarios? One is an attack on the northern flank, on Northern Norway, to draw off all of our reserves and then blitzkrieg through the centre, possibly without nuclear weapons, or alternatively, the cutting of our sea communications and the flow of vital minerals and fuel which come round the Cape, in which case they would not have to kill a single soldier but would win hands down?

Mr. Critchley: There are many alternative scenarios and one of the problems which NATO faces is that it has to plan to meet all these eventualities. Were war to break out, it would clearly be short and violent and result in the defeat of the weaker side, which is the most important point. As long as our side remains the weaker side we are clearly faced with the prospect of defeat under the circumstances I have described. It is no good holding on to one's theatre nuclear weapons for use only after we have lost the

conventional battle. They have to be used first and early.

Mr. Pattie: Could my hon. Friend tell the House at what point during the scenario he is describing the forces might expect to get their pay rise?

Mr. Critchley: I can only hope that, given the somewhat nightmare circumstances which I have described, our great Conservative Party would have been returned to office and the hon. Member for Chertsey and Walton (Mr. Pattie) would not be at the Ministry of Defence.
We have to restore theatre nuclear deterrence, which means that we have to adopt the enhanced radiation warhead and the cruise missile system if we are to deter. At the same time we have to rely upon forces in being in Central Europe rather than rely upon reinforcements and reserves, because there will not be time to bring them in. If we do those two things, and only if we do them, shall we be able to shore up our defences, thus ensuring that war will never happen.

8.12 p.m.

Mr. Robert Mellish: I confess that I spent only six years in the Army and, although I went through the ranks, I never did get beyond the rank of major. I can tell the hon. Member for Aldershot (Mr. Critchley) that while I was in the Army no one ever talked to me about strategy. They told me the things to do and I went out and did them. I was never at that level where great matters of strategy were discussed.
I thought that we were talking today about the Armed Forces and their pay rather than how wars should be won or lost. I know nothing of the strategic arguments about which the hon. Member for Aldershot is obviously knowledgeable. He gave me the impression at one time in his speech that if only he had been involved in the strategy of the last two world wars—if that could have been possible—we would have done rather better than we did. I do not understand these great matters and I would not get into arguments with anyone who does.
Something that appeals to me as an ordinary bloke is that Russia is an aggressor nation. Any nation that is an aggressor nation is in an entirely different position from a nation such as ours which


does not want to fight anyone at any time. It is against that background that all strategy has to be poised. The right hon. Member for Down, South (Mr. Powell) does not appear to agree with me.

Mr. Powell: I thought that I heard the right hon. Gentleman say that Russia was an aggressor nation. It seems to me that that flies in the face of almost the whole history of the Russian people.

Mr. Mellish: The right hon. Member is a man of great intellect, but he has only to look at the buffer States around Russia, at their attitude and behaviour and at the build-up of arms to see what I mean. If that is not being aggressive, I should like to know what is. Besides, as I see it, a nation that does not want anyone else's territory does not want armed forces, massive Polaris weapons and the rest.
I came into this debate for a simple reason. Obviously I am for the Armed Forces. That does not make me a better British citizen than anyone else. As a member of the Labour Party, I have always resented the few individuals of my party why convey the impression that they speak for the Labour movement and take great pleasure in seeking to cut back on Armed Forces expenditure of any kind and who seem to preach a doctrine which says that the nation cannot and must not be defended. I have never approved of that. I have said that Russia and others are aggressor nations and that we must have adequate defence, within our means.
The hon. Member for Aldershot, in reply to my right hon. Friend the Member for Fulham (Mr. Stewart), said that no doubt the next Conservative Government—if there is one, and I pray that there is not—would substantially increase the pay of the Armed Forces by 1979. He went on to say that we would get the money by expanding our economy. He put his full stop there and went on to talk about the strategic argument. The next General Election will be all about how to expand our economy and what sort of Government is best equipped to do it. I will wait until the appropriate time to express a few remarks about the Conservative Party, its performance and possibilities.
Earlier this year I went aboard HMS "Tiger". I had the privilege of being entertained by the captain and the officers.

They suggested to me, rightly, that I should go down to the petty officers' mess and listen to the lads, and hear what they had to say. I was delighted to do so. I went to the petty officers' mess and we had a long discussion. They began by being truculent and difficult, understandably. After about an hour we were beginning to see each other's point of view. I did not concede to them that automatically and overnight they must get a vast amount of extra pay. I discussed with them—and they were patient enough to listen—the problems which I saw the Government facing in Britain in the battle against inflation. I thought that all parties were united in agreeing that inflation is a curse and a menace which has to be controlled and which, unless it is controlled, will affect every stratum of society, none more so than the forces.
I put it to these people that whatever the Government may or may not have done they had at least shown guts in trying to deal with the problem of inflation and in doing so had made themselves extremely unpopular, especially with the Armed Forces. I pointed out to them the battle that the Government were having with the firemen at that time. My hon. Friend the Member for Peckham (Mr. Lamborn) and I were involved in this. We had a great deal of sympathy with the firemen. I do not think that there were many hon. Members who did not have some sympathy with them. The Government refused to pay more than the 10 per cent. basic rate to the firemen. The firemen wanted more, and I think that they had a good case.
I told the men on HMS "Tiger" that it would be an odd Member of Parliament who came aboard a ship of that kind, recognising the heartaches and difficulties of the men, and said that, in spite of what we were saying to the firemen and to the police and many other sections of the community, the Armed Forces were in a separate category and, somehow, the Government would find money for them. If I had said that, they would never have believed it. The men in the Armed Forces are not made up of that type of person. They wanted this argument. They wanted to get it out. This provided them with an opportunity to get a lot of things off their chests. My record was known to a few of these people and they had it out with me.
At that time we were expecting the Review Body's report, and the big question was what would be in it. I did not know and I hope that my right hon. Friend did not know. The Review Body was impartial. I told the men that whatever happened the Government would not increase their basic rate by more than 10 per cent. I said that the Government could not do so. But I did agree — and here is the argument for these lads—that we had to do a great deal more in the interim period by way of what I call fringe benefits, rent allowances, overseas allowances and the rest. Where we could make an immediate impact we should do so.
I explained, and I think it was accepted, that if the Government decided that the Armed Forces were a special case and gave them much more than 10 per cent. there would be a reaction in industry. I can say sincerely, looking back at that conversation, that I did not meet anyone who was not expecting what the Government have now proposed, that is, the basic rate of 10 per cent.—indeed a bit more. I want to know whether the Government have gone to the fullest extent for the Armed Forces within the restrictions of the pay policy that we have been applying to the rest of the community. Have we gone far enough? What more can we do?
I take the point that we are perhaps reaching the stage in the argument where the men at the bottom should be heard more. That should certainly be looked at. However, I do not agree with the argument that everybody should be in a union with branches all over the place. I can imagine that situation. It would be a hell of a job trying to work that lot out, especially on the smaller charges, with a man appearing before the commanding officer and getting seven days CB. I can imagine that, by the time he had gone through all the trade union ritual, the officer commanding would wish that he had never even seen him. So it is not a practical argument, and I do not accept it.
Nevertheless, in modern times, the relationships are different. I have been a Member of this House for 32 years and have listened to many arguments about defence and the pay of the Armed Forces.

At no time have we paid them enough—there is no question of that. They have never been properly paid for their work for the nation. But when the time comes the nation tells them how grateful it is—we hear all the stuff and nonsense about the debt we owe. But in peacetime never do we pay them enough.
Nor are their conditions ever as good as they should be, although they are far better than they used to be. Back in history, when we were a great Power—perhaps the greatest—the conditions in our Armed Forces, then the Royal Navy and the Army, were pretty grim and disgraceful. We have never paid our people in the Armed Forces their full worth. As has been said, any man who joins the Armed Forces is a man who has our full and greatest respect and admiration. He has guts. He cannot know what the history will be, but if there is trouble he is the first to be involved. He deserves the best that the nation can give him. In that sense, I ask for greater understanding of the problems of Service men.
When I was Minister of Public Building and Works—I was only in the job for about a year and was fairly bright in it—I did something of which I am proud. We came to a special understanding with the War Office that, when a man was due to leave the Army, a year or so beforehand he would let his commanding officer know, and the commanding officer would arrange to get him in touch with the local authority where the man came from originally. We had an understanding that the local authority would then automatically put that man and his family on the housing waiting list. How far has that scheme gone? What has been the result? Does it still apply?
We ought to be able to give a man who is due to finish his service in the Armed Forces an absolute assurance that the local authority from which he came will give him a place. A man who has served in the Armed Forces for seven years or more should not have to come out and take his place in the housing queue with some wretched local authority. He is surely entitled to go to the top of the queue and take preference—I do not care who hears me saying that. That was the principle I followed in those negotiations with the War Office. What success have we had?
These are fringe benefits that the Armed Forces would like to hear more about. A man should know that, having served in the Armed Forces for seven or more years, he will be guaranteed being placed at the top of the local housing authority's waiting list. I know that at one stage the scheme was running rather well, because, as Minister, I was writing to one or two local authorities that I will not name telling them where to leap because they had written to me complaining because they had had to give a soldier this or that preference.
I want more done for our people. I believe that what has been done is within the limits of the pay policy. The vast majority of the people in the Armed Forces are intelligent and decent people and did not expect more than 10 per cent. I put it to the Conservatives that they will get no votes out of exploiting the Armed Forces and saying "We are the party which truly represents you, whereas Labour does not." That argument is regarded as a lot of eyewash.
The people in the Armed Forces are as concerned as anyone else about the state of their nation. The Conservatives should not underrate them. They know precisely what the arguments are. The idea that they have been put in a special category is not what they expect. They expect to have comparability, yes, but they do not expect to be in a special case which makes them better than the firemen or the policemen—and, incidentally, I think that these days it is more dangerous to be a policemen than a soldier on the streets of London, for example.
I hope that a message will go out from this House not on a party political basis—"Vote Tory and you get a couple of bob for the Armed Forces"—but from a united House determined that the Armed Forces will get not only value for money but the pay and conditions that they have a right to expect.

8.28 p.m.

Mr. David Walder: There was a nasty moment. Mr. Deputy Speaker, about 10 minutes ago when I thought that the debate might have got out of hand—though I hasten to add that it had nothing to do with you. But with the contribution by the right hon. Member for Bermondsey (Mr. Mellish) we have now

got back to pay and conditions. I was thinking that we might get right back to the whole basis of the debate, because it is on a motion to reduce the salary of the Secretary of State for Defence by a half, and, having heard his arguments, fighting for his life and for half of his own salary, one concludes that perhaps there might be some explanation of the poor showing that he has made in the Cabinet in arguing for the Armed Forces. The right hon. Gentleman was not at his best today.
The right hon. Gentleman suggested—and it was followed up by two of his hon. Friends—that in some way the Conservatives are wrong to talk about a decline in morale, that we are perhaps exploiting the situation. But the Under-Secretary of State for Defence for the Royal Air Force said about a month ago that morale was not all that he would like it to be. I do not know what the Under-Secretary of State's standards are, but there is at least a minimal assessment.
All of us know that there has Peen a significant decline in the morale of the Armed Forces, attributable to conditions, to pay and to defence cuts, although I agree with the right hon. Member for Bermondsey that, in a sense, all Service men will always grumble and that no Government have ever paid them their proper due. I accept that as a limitation, but undoubtedly in the last 12 months there has been an acceleration of discontent among Service men and their families. It may be that conditions in Northern Ireland, over-stretch and the rest have exacerbated the situation.
The X factor, I suspect, is the clue to the argument that we have put that the Armed forces should be considered, in the context of the Government's own pay policy, as "a special case". Over the last two years the Government have given the impression—rightly or wrongly—that they and their Labour Party colleagues were not particularly concerned with the Armed Services. They have given the impression that they are more interested in defence cuts than in supporting the Services. They have given the impression also that they have finally, rather grudgingly, admitted some part of the Review Body's recommendations, later rather than sooner. This is the issue between us—whether the Government should have dealt with the matter immediately or acted as they did.
The hon. Member for Loughborough (Mr. Cronin) always provides some consolation for us when he takes his weekly rides at Knightsbridge Barracks and assures us that the Life Guards, the Blues and the Royals are not in an active state of mutiny. He said that the Review Body was totally independent. But this body has to consider Government policy, and its recommendations disappointed the Services. We have now reached the stage where the Services are disappointed with politicians generally and even with Governments. Of course there is nothing surprising in that—most of the population is disappointed.
But the Services are disillusioned with the Review Body itself. Therefore, I believe that we should look at the Review Body's composition and sphere of operations to see whether it is possible to give Service men a much stronger impression that its members keep in touch with the real grievances, that they are really pushing at the Government and are not just creatures of the Government.
I have wondered how many people in the Services will read the recommendations The Review Body's report was not an easy document to read. It reminded me of criticisms made by one of my English masters at school who said "For God's sake, chop your sentences." Many of the sentences in the report are incredibly lengthy and not as meaningful as they might be.
We should think in terms of improving the Review Body. It has lost face with the Services for a variety of reasons. Labour Members seem to think that the Government's acceptance of some of its recommendations will produce a situation in which Service men throw their hats in the air for joy and their wives wave their head-scarves. They think that this will halt immediately the exodus from the Armed Forces. I should like to think that would happen, but I suspect that if one thinks in these highly optimistic terms one is failing to understand the mentality and psychology of the Service man.
He is not in a job where he can simply walk out, down tools and leave tomorrow. He tends to think of the advantages and the excitement of Service life. In the past one of the advantages has been a

certain amount of what I would call "security of tenure". But this has been threatened and diminished by the defence cuts.
The idea that a man and his wife make up their collective mind to leave the Services on an impulse and that they will change it again on another impulse is totally false. A lot of Service men have been saying over the past two years that the forces do not provide the sort of career that they chose originally when they joined. They have become disappointed, and they take the view that the Government are indifferent. They have come slowly to the conclusion to leave the Services after a lot of consideration. The idea that the Government in putting up their remuneration—rather grudgingly—will stop the outflow is wildly optimistic.
I do not glory in that. I do not enjoy that situation, and I do not think that what I have said is an example of an Opposition speaker making political capital out of it. I deplore the fact that that is so. I think that it will take a considerable time to restore the Service man's confidence in any Government, and that it will take a long time indeed to restore the confidence of the Services in a Government of the nature and the political complexion of that on the Benches opposite.
I do not suggest that this situation is the fault of the Service Ministers themselves. No doubt they do the best job of which they are capable. But there is a feeling that the Labour Party is not sufficiently interested in the Service man's task and does not provide the sort of support that he would appreciate and welcome. Service men cannot strike, and they cannot leave their jobs immediately, but I suggest that they, like the old soldier, will continue to fade away, and I must confess that, on the Secretary of State's showing at the Dispatch Box today, I take the view that about all he can do is to stand idly by and wave farewell.

Several Hon. Members: rose—

Mr. Deputy Speaker: I do not like doing this, but I feel that it will be helpful to the House. About six hon. Members are anxious to take part in the debate. They could all be called if speeches were confined to five minutes'


duration. Everyone would be happy if that were done, but this is, of course, a matter for hon. Members themselves.

8.36 p.m.

Mr. John Roper: I agree with two of the points made by the hon. Member for Clitheroe (Mr. Walder). I agree, first, with what he said about the style of the Review Body's report. Having read and enjoyed some of the hon. Gentleman's novels and his histories, I think that the Ministry of Defence might consider commissioning him to write a popular version of the Armed Forces Pay Review Body's Report which will be understood and make my right hon. Friend more popular amongst Service men.
The other matter on which I agree with the hon. Gentleman—I shall return to this because I regard it as important—is that pay is only one factor, and there are a number of other grievances—one or two of which are referred to in the Review Body's report—on which I hope my right hon. Friend will take action in the near future and go some way towards meeting the general grievances that exist.
Inevitably in a debate of this sort there have been a number of predictable speeches and the creation of a certain amount of synthetic emotion, but I believe that, given the difficulties that face my right hon. Friends in the Government at this stage, the decision that has been taken this year has been understood by many people in the Armed Forces.
I believe that what has been done—and this is where I disagree with the hon. Member for Clitheroe—has treated the Armed Forces as a special case. They have been given a 13 per cent. pay award, which is 3 per cent. above the amount that was set for this year, plus a guarantee of comparability within two years. That makes the Armed Forces a special case and, in the circumstances, was as generous an award as one could expect the Government to make at this time.
I was, however, particularly pleased that my right hon. Friend was able to refer to the arrangements that are proposed for pensions in future. As I understand it from what he said, pensions for those up to the rank of brigadier will be on the same basis as we in this House have granted to ourselves, which is that we are pensioned on a notional salary which is comparable with that paid elsewhere,

even though we are paid only about three-quarters of that salary.
I am anxious to discover whether the concession that was announced by my right hon. Friend will apply only to those officers and Service men who are covered by the Review Body—that is only those up to the rank of brigadier—or whether the arrangement will apply also to senior officers above that rank. The impact of the pay freeze above that rank means that pension distortions for senior officers have been even more serious in recent years. I should be glad to know whether some—

Mr. Mulley: The pay of officers above the rank of brigadier and their equivalents comes within the responsibility of the Top Salary Review Body. Previously the same principle has applied, for example, to senior officers and civil servants. As my hon. Friend will know, we have not yet had the report of the Top Salary Review Body.

Mr. Roper: I was directing my remarks to pensions. As I understand it the concession that my right hon. Friend announced this afternoon will apply only to those covered by the present proposals of the Pay Review Body. Will all categories be covered?

Mr. Mulley: That is right. In order to have an enhanced pension it is necessary to have a comparable rate against which to measure. Until the Top Salary Review Body's report is available, we shall not know what recommendation has been made for senior officers. That matter has still to be settled.

Mr. Roper: I gather from the attitude that my right hon. Friend indicated that the Government will be sympathetic in considering a possible extension to cover other officers.
I shall raise one or two other matters of concern that I feel could be tackled by the Ministry of Defence in dealing with the conditions of Service men. There is one such matter that is referred to in paragraph 9 of the Review Body's report, dealing with baggage allowances. Apparently the cash allowances has been frozen and kept at a relatively low level. I hope that that issue will be considered. It is a matter that has been brought to the attention of many of us when we have


visited Service men abroad. It is something that could be tackled with relatively little difficulty and little expense.
Similarly, there are a number of housing factors that should be given further consideration, including some of the points raised by my right hon. Friend the Member for Bermondsey (Mr. Mellish) and those met by Service men returning to Britain and having difficulty in getting back their houses. There is the difficulty of meeting the costs involved. It would be interesting to know whether the Ministry of Defence would be able to assist in that direction.
I raise two further issues that have been brought to the attention of a number of hon. Members who have recently been in Germany. First, there is concern about the application of the family income supplement to Service men. It is unfortunate that Service men should require the supplement and it is unsatisfactory that, owing to disagreement between the Treasury and the Department of Health and Social Security, it is impossible for the supplement to be payable to Service men when they are in Germany.
Finally, there is the question of the overseas allowance for the 16 to 18-yearold children of Service men who have left school and may not have returned to the United Kingdom. That is an issue that merits further consideration. The resolving of it would not cost a great deal of money and would deal with a serious problem affecting senior NCOs in British Army of the Rhine. I consider the settlement to be generous. I hope that many of those who are considering leaving the Services will reconsider their position.
Before concluding I make one or two remarks about the recent behaviour of the Chiefs of Staff, which was referred to by the right hon. Member for Chesham and Amersham (Sir I. Gilmour). I realise that the Chiefs of Staff face a dilemma. In a sense, they are public servants, but as they see themselves they have two roles—one of acting as principal advisers to Ministers in defence matters and, secondly, one as acting as the representatives of the forces in the absence of trade unions in the Armed Forces. They believe that they have to do the best that

they can to ensure that those who serve in the forces under their command are as well treated as possible. I feel that they find themselves in a dilemma on certain occasions. Certainly that would appear to have been the position recently.
Given the restraints resulting from their first responsibility as public servants and as advisers to my right hon. and hon. Friends, I am not quite sure how they can demonstrate to those in the forces that they are necessarily doing their job of representing them as well as they would like to carry it out. No one would deny that this dilemma and ambiguous role presents a problem for the Chiefs of Staff. They do not enhance their effectiveness in representing the Armed Forces by breaking the rules and leaking information to the Press.
The settlement has to be seen in the context of a number of settlements in the public sector with which the Government have had to deal in recent months. In the light of the picture as a whole it will be seen that they have struck the right balance in this case. That will be recognised not only in the House but in the country and the Armed Forces.

8.46 p.m.

Miss Janet Fooks: I suppose that I have been on as many visits to defence establishments as any Back Bench Member in recent years. Two striking features came out of those visits. First, when those visits have been all-party, nearly always there has been a shortfall of Labour Members. That is an indication in practical terms of how much interest is taken. Above all, those who seem to be most anxious to cut defence expenditure are never seen on those visits.
The second feature is the universal pre-occupation with pay and conditions and the discontent with them. This was particularly apparent when I visited the submarine "Orpheus" at sea for a whole day. Cooped up as I was, there was no getting away from the grievances that were trotted out in no uncertain terms. What really got the men was that when the military salary was introduced in 1970 there was an understanding that there would be comparability with outside occupations in return for realistic assessments of accommodation and charges. In practice, what happened was that to comply


with pay policy they fell further and further behind outside occupations. But the Government exacted their pound of flesh when they increased charges for food and accommodation. This was the real grievance and bone of contention.
More alarming was the lack of confidence in the Review Body. After my visit to the submarine, I wrote to Sir Harold Atcherley, the chairman, and told him, in slightly toned-down terms, what had been said to me by the submariners.
It is refreshing that the Review Body has now taken a more robust approach in its present report. The report states what many of us have been saying for months. It is summed up on page 1, where it admits
On two occasions only—in 1972 in our First Report and in 1975 in our Fourth Report—have we been able to base our recommendations wholly on the principles and considerations that we regard as appropriate to recognise and reward the many and varied tasks carried out by the Services and on those principles and considerations alone.
That is an admission that it has been constrained by considerations of the Government's policy.
It is pleasing that there is at least a promise of comparability in two years but it is felt amongst the forces that this is not good enough and that they require comparability to be reached in a shorter time. That is certainly the view expressed in no uncertain terms by the Forces Wives' Association. I am proud that this organisation sprang up in the Plymouth area as a result of the desperation of wives who felt that perhaps they could speak out more than their Service husbands. But what an indictment of Government policy that that should be necessary.
They also showed commendable initiative in bearding the Prime Minister himself when he paid a recent visit to open the Fleet maintenance base at Devonport dockyard. They are not satisfied with the present arrangements, and they told the Prime Minister that quite definitely. They regard them, in homely terms, as "jam tomorrow" and, to use another expression, tomorrow, they feel, never comes.
After the years of oppression that they have suffered it will take more than one report to restore their faith and confidence in the Government's intentions. That is

a most important point. However, there are other grievances that assume greater significance when they are added to the general discontent.
One Labour Member made the point about baggage allowances. The arrangement here stems from the curious principle that a non-wage benefit has to be offset by the wages and salaries paid. That seems a very niggardly and mean approach. The position on baggage allowances is not improved when the Service men abroad see that their civilian counterparts, say, in the Ministry of Defence, have more generous allowances. I gather that this applies where accommodation entitlement is frozen, and again that has to be set against wages and salaries paid. I therefore ask the Minister who is to reply seriously to reconsider this point.
My hon. Friend the Member for Gosport (Mr. Viggers) touched on another grievance relating to income tax. In view of your plea, Mr. Deputy Speaker, that we should keep our speeches short, I shall not dwell on this aspect except heartily to endorse what my hon. Friend said. I do so from my experience of talking to Service men and their families. There is considerable discontent about various aspects of the impact of income tax on them.
The position on Services pay was summarised perfectly in a letter that I received this morning from a member of the Forces Wives' Association writing from my constituency. I shall not quote the whole of it, although the whole of it is worth quoting. She wrote:
My husband is a Chief Petty Officer of some 10 years service. He is a skilled man with considerable experience in his field. To him, words such as productivity deals, bonus, incentive schemes, profit sharing, working to rule and overtime pay, etc., are a foreign language. It is quite normal for him to work 36 hours or more continuously, tea breaks or lunch breaks frequently missed out. Colds and tummy upsets are not allowed to interfere.
She refers to the amount of separation of her husband from her and her family for months at a time. She continues:
The general feeling among the servicemen I have spoken to is one of bitterness at being taken advantage of, and insulted with an inadequate pay increase of only 10% with no compensation for separation or unsociable hours. The result is undeserved financial hardship for families of professional men.


She says at the end:
One can only hope that in the foreseeable future a man will be paid what he is worth.
This state of affairs has considerable implications for Service morale and Service effectiveness, a factor that has already been discussed in the debate. We have witnessed alarming figures for the departure of many officers, and I am not very hopeful that we shall see a slackening of that exodus as a result of the present pay rise. I hope that I shall be proved wrong, but I think that it will take more than this one declaration to offset the disillusion of several years.
In many respects it is a false economy when one considers the cost of the skill that is required to train a jet pilot, for example. Perhaps the Minister will give us the figure tonight. I believe it to be in excess of £500,000, but no doubt he will correct me if I am wrong.
Therefore, I feel that the Services still have a grievance, and I hope that before too long it will be put right.

Several Hon. Members: rose—

Mr. Deputy Speaker: Order. The Front Bench speakers have very generously agreed to postpone the commencement of the winding up speeches until 9.15 p.m. Four other hon. Members still wish to take part in the debate. If they take five minutes apiece, they will all be called.

8.56 p.m.

Mr. Geoffrey Pattie: This debate is not just about pay; it is also about morale. Morale is something which is apparently always excellent. It is rather like the Chancellor in the days of fixed parities who denied that a devaluation was about to happen until it happened. So we have no gradations on the scale of morale. From excellent we move straight to mutiny—or more properly described in the age of the volunteer as premature voluntary release.
The Prime Minister is fond of saying that all sections of the community must contribute in the battle against inflation and that we must beware of making various groups of special exceptions. However, I should like to know, as would the House, how many groups in society have the kind of liability that requires instant

mobilisation to Belfast or Belize, with lives possibly at stake, and unlimited hours of work in difficult conditions.
Service men take on this liability because of a genuine love of the Service. But the only Service men who want to stay in the Services now are either those with so much service that they are too committed to leave, or those with so little service that they can stay a little while, enjoy themselves and then go. The people in the middle, the leaders of tomorrow, are getting out as fast as they can.
As my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) said, the facts speak for themselves. Why is this happening? Pay is an important element, but it is only one of the elements, because pay levels give a man an idea of how he is valued by society. But there are several other problems. The working of the Rent Act 1974, for example, has caused problems for Service men trying to repossess their property from recalcitrant tenants. This in turn leads to family separation and empty married quarters at various stations while the wife remains in the marital home.
Baggage allowance has been mentioned, so I shall not repeat that point.
The Service man, as the right hon. Member for Bermondsey (Mr. Mellish) said, is not looking for perks and bonuses, but he feels that he is getting a raw deal whichever way he turns. Pension calculations are also suffering from the restrictions in pay, apart from those who will be retiring in the next two years.
All this adds up to a tremendous battering on the domestic front, particularly from the wives, as my hon. Friend the Member for Plymouth, Drake (Miss Fookes) mentioned. The Service man can withstand this for a while and up to a point because he has always had his professionalism to fall back on. But can he still do that? It is unlikely that any Government, even a future Conservative Government, could afford the level of expenditure necessary to provide what one might call a de luxe level of equipment. Indeed, it can be a challenge for individual units to have to make do and mend from time to time. But when it becomes standard practice for vehicle windscreens to be awaiting replacement


for, say, six months and tank engines continually to fail, morale suffers because the Service men are unable to be professional.
A young Army officer in BAOR recently said:
The pursuit of military excellence is no longer possible.
If the House reflects on that phrase, it will realise that it is a very chilling condemnation of the present situation in the forces, as it is a special kind of humiliation attendant upon any position and situation if British equipment fails because it is either obsolescent or incapable of proper maintenance. That is particularly so as our forces serve alongside NATO allies, who are always looking at this kind of thing.
I happen to know that in a recent exercise a British armoured unit was ordered to pull to the roadside to allow a Belgian armoured unit to go through because the NATO commander placed greater reliance on the Belgians reaching the deployment zone on time whereas the British would be prone to mechanical breakdown and delay. Although throughout our history we have often asked the Services to cope with inadequate resources, we cannot do that any more in an age of high technology.
The malaise that the Government have produced in the Services is particularly insidious because it is not only morale that is being undermined but discipline. It is hard for officers to keep up the spirits of the troops when they continually find that they cannot get the equipment in service or carry out the training they need. The present Ministry of Defence team of Ministers must surely be the most muddled, incompetent and inadequate since the Crimean War.

9.0 p.m.

Rear-Admiral Morgan-Giles: The tenor of speeches from the Secretary of State and every other right hon. and hon. Member on the Government Benches has been that the forces cannot be a special case. That is the crux of the argument, because comparability is not a special case. It is something in its own right. The forces do not want to be a special case, but nor do they want to be left completely behind. The Government are saying in effect that the

forces must be the only people to be left behind.
The purpose of the Review Body is to see what has happened with all other groups and then say that the forces should have a certain figure. It is bogus for the Secretary of State or anyone else to say that the forces would be a special case. Because they have been left behind in the last few years, they should not be left even further behind now. I agree with the hon. Member for Huddersfield, East (Mr. Mallalieu) that the X factor would provide a perfect way of bringing up the pay if the Government wished to do so and the Secretary of State had sufficient clout in the Cabinet.
In previous debates I have defended the morale of the forces and said that, despite everything, it had not been damaged. I am sorry that I must say today that since the latest pay announcement I agree with my hon. Friends who say that it has been damaged. That is my information. As for unions, I can sum up the position there, from my knowledge of the forces, by saying that they would sooner starve.
The forces feel that they have been given a post-dated cheque. That might or might not be all right, but cheques from that source have bounced before. Can the Minister give one categorical assurance? Will the Prime Minister's promise that comparability will be restored within two years be fulfilled regardless of incomes policy of any sort? Without that assurance, the forces will feel that they have had no assurance at all. They may be given the same old line all over again.
Of course, it is not only forces' pay which worries Service men but disarmament in the face of Soviet growth. Soviet adventurism in Africa, in Zaire, is in the headlines this very day. Western countries, including Britain, must be prepared to face intervention in Africa and in other parts of the world to protect Europeans and the independence of African countries.
I forecast that British troops will be needed in Rhodesia unless the Government support the internal settlement now and remove sanctions forthwith. I suppose that that will take place within the next year.
I am afraid that the Government's defence policy has failed. The Secretary


of State is the responsible Minister and he should certainly have his salary cut. In fact, in my opinion, he should resign.

9.5 p.m.

Mr. Patrick Wall: The interesting aspect of this debate is that nobody has argued about figures. We all agree that the standard of living at every level of society has been cut by a considerable amount, in recent years. We know that the standard of living of the troops has been cut by 32 per cent. under the lower national standard. The Government are making this up by a figure of 14 per cent., leaving 18 per cent. still to be made up. The important point made by the Secretary of State today was that this figure would include inflation. In other words, they will go back to the full level of comparability in two years.
The Secretary of State will remember that it was the Labour Government who introduced the military salary. I was always opposed to that concept, but the X factor was brought in to keep the Services at a higher rate than the average wage in industry. Yet in the last five years the Services have been paid at a considerable lower rate. Even after a wait of a further two years, they will not be back to the full comparability that they were promised in earlier days. No industry with a strong trade union would ever have allowed that to happen to its workers.
The result is shown in the recent figures given to me by the Secretary of State. In 1977–78, 1,993 officers applied for voluntary release and 1,368 actually left. That is a total of 3,361 officers who will leave the Services in one year. I regard that as catastrophic for the future of the Services. At the same time, in the same year 8,752 other ranks left. Comparing this with what happened last year, it means that the numbers leaving the Navy have risen by 68 per cent., the Army by 100 per cent., and the RAF by 77 per cent. I hope that these figures will improve, but I doubt it.
What will be the effect, for example, on the Navy? I understand that the small number of helicopters we now possess, which have been cut considerably by the recent measures, do not have sufficient pilots to operate them. The pilots are leaving the Service because they can

obtain very high rates of pay on oil rigs and in the Gulf. Is the right hon. Gentleman able to tell the House that all existing helicopters can be manned? I understand that it will be very difficult to man HMS "Bulwark." Even though "Tiger" and "Ark Royal" are being paid off with a surplus of 3,000 men, yet I understand that it will be very difficult to man this ship, even apart from air crew.
The important point to note is that those who are going are the skilled men—those who can obtain good wages in civil life. The Royal Navy is now badly over-stretched. Those who stay on in the Navy are also suffering because of that degree of over-stretch. They think that they are being treated unfairly. I remind the right hon. Gentleman that the last time we had a combination of unfairness and cuts in pay we had Invergordon, which had serious effects on Herr Hitler's ideas about Britain and therefore on the start of the Second World War.
The Army is also over-stretched. In Northern Ireland, for a tour of duty of 116 hours per week, men are being paid £23·70. That is quite appalling. The Army are also concerned about the whole question of status. The status argument also applies to the RAF. I refer to status vis-à-vis the Civil Service. Civil Service staff in Germany enjoy far more perks than the Army or the RAF.
Let us take the status of Service personnel in embassies. We know how military attaches are treated alongside the diplomats. The diplomats are given all the perks. The military attaches receives only some perks while they are there, but are treated very much as inferior beings.
All this is known in the Services, and particularly in the Army and RAF, whose personnel associate closely with the Civil Service and who resent it very strongly. I hope that the Secretary of State will be able to do something about the situation.
The most important factor in regard to the Royal Air Force is the maintenance of its aircraft. The right hon. Gentleman knows very well that skilled technicians and mechanics are leaving the RAF at a very fast rate. It is very doubtful whether even the reduced number of aircraft which we now have to defend this country could be maintained in time of war.
On the subject of welfare, how many Service officers in all three Services are living in the quarters to which they are assigned? I understand that a large number cannot afford the quarters that are given to them. This is an important factor. Some of them are having to turn their quarters into officers' messes to make the grade. A total of 40 per cent. of troops are said to be on rent rebates and a number on family income supplement. The Secretary of State will know that, if pay is increased, it has an effect on FIS and in the end the man concerned may not benefit by a penny. These effects will continue, on the Secretary of State's own admission, for the next two years.
The difference between the two sides of the House can be summed up in a Question I put to the Prime Minister. I asked whether he regarded the Services and the police as special cases. Those are the two organisations which do not have the right to strike and therefore depend on the protection of the Government. They are the two vital organisations which protect us against internal subversion and external attack. Therefore, they should be the first priority of any Government. The Prime Minister does not regard them as a special case.
That is the difference between the two sides of the House. That is why I believe that the Government and, indirectly, the Secretary of State have failed to maintain the status which our troops are entitled to enjoy.

9.10 p.m.

Mr. Eldon Griffiths: I have no personal wish to impoverish my friend, the Secretary of State. However, I shall vote for the motion for three reasons. Two of the reasons are far too large to deploy in five minutes and one of them concerns the Royal Air Force, which is heavily concentrated in my constituency. I mention the two large reasons. I hope that the Secretary of State will understand that brevity makes it impossible to deploy them in full.
The cruise missile and the neutron warhead are indispensable to the effective defence of the West. I am sorry that President Carter, misguidedly, has decided not to proceed for the time being with the development of both these weapons. The Secretary of State, who well understands

the whole strategic balance, understands the pluses and minuses of the argument for both of these terrifying systems. It was his duty to press more vigorously than he did upon our American allies the importance of proceeding with the development and deployment of both the weapons. I am sorry that he did not do so. I refer him to the debate in the American Congress and to the publication "The Cruise Missile" which no doubt he has seen. I hope that he will give careful thought to the importance to NATO of developing the cruise and the neutron warhead.
Like my hon. and gallant Friend the Member for Winchester (Rear-Admiral Morgan-Giles)—who came to the House on the same day as I did—I think of the situation in Zaire. Having travelled widely in Africa, I am certain that this country will be called upon from time to time to rescue its nationals, whether in Rhodesia or anywhere else. We have more trade, more investment and more technicians, teachers and engineers engaged in that large and complex continent than any other country. The time will come when we shall need to go to the assistance of our nationals.
I wondered today, coming to the House, whether if the call had come we would have the aircraft. I fear not. We have stood down the long-range element of Transport Command. The Hercules, though an admirable aircraft, does not have the lift capacity to deal with distances of the type involved. I wondered also whether we would have the pilots. We might at a stretch, but it would be only at the cost of removing them from other areas of deployment which are equally vital to the country. I wondered whether we would have the paratroops. The Parachute Brigade has been far too severely cut. We would find it almost impossible to do this particular job. Would we have the will to do it? It is the will that matters most.
One of the reasons that I shall vote for the motion is that in similar circumstances to those faced by our French and Belgian allies, this Government would not have had the guts or the courage to undertake the operation.
The Royal Air Force is more heavily concentrated in my constituency than in almost any other. During NATO exercises we have more flights than London


Airport. I went to see the wives, the officers and the airmen in my constituency and I spoke to them. I listened to them and I went to the Secretary of State who, as he always does, courteously agreed to listen. I am grateful to him and to his Under-Secretary for having given consideration to what I had to say about the wives and airmen of RAF Honington. I hope that they will take back the suggestion that somehow it is making party politics if a Member of Parliament, having listened to his constituents, honourably goes to a Minister first and explains to him in detail how they feel.
The Secretary of State and his Under-Secretary know that large numbers of young men who went into the Services not for money but to serve their country out of pride and patriotism, with their wives, are now disillusioned and impoverished. They asked for bread. This review has given them a stone.
The truth is that those of us who honourably represented to the Government the feelings of our constituents in this matter, far from playing party politics, did what we conceived to be a public service. I regret that the Secretary of State, who, no doubt, fought as well as he could within the Cabinet, did not get a fair deal for our Service men. Consequently, the motion should be passed.

9.15 p.m.

Mr. Churchill: We have had an important and useful debate. Hon Members on both sides have expressed their concern over the pay and welfare of the forces and they will shortly have the opportunity of reflecting that concern in the Division Lobbies.
I wish to begin by paying tribute to the Armed Forces of the Crown for the exemplary way in which they have served the nation over the past year, often under very trying circumstances. The Jubilee reviews, in which the three Services proudly paid homage to their commander-in-chief, inspired the nation and commanded the attention of the entire world, though it is fair to point out that they imposed a heavy work load on the forces.
The terror and violence have continued unabated in Northern Ireland and yet, in spite of the dangers, the long hours and the miserable conditions, the Army, assisted by the Royal Navy, the Royal Marines, the Royal Air Force, the Ulster

Defence Regiment and the women's Services, have carried out their duty without question or complaint, and with a courage, skill and restraint that could not be achieved by the military of any other nation.
The right hon. Member for Down, South (Mr. Powell) paid tribute to the courage of the men and women of the UDR and to their refusal to be intimidated. Having had the privilege of going out on patrol with them one evening recently, I wish fully to associate myself and the Opposition with his remarks.
In addition to commitments in Belize and Bermuda, the forces have had to carry the full burden of the firemen's strike, in which they saved many lives.
On top of all this, they have had to cope with the purely political decisions of the Government—the defence review, the restructuring of British forces in Germany, which involved the moving of 18,000 men and their families, the massive rundown in manpower, which has imposed heavier work loads, and the enforced redundancies.
I do not know what the Prime Minister had in mind when he said on Independent Television News on 26th April:
The Armed Forces have security in their jobs.
Does he not know that 570 men from the RAF and 1,653 soldiers from the Army have been sacked by his Government in the past year? These were not cases of premature retirement. These men were physically sacked. Yet the Prime Minister tells them that they have "security in their jobs". The Armed Forces have borne all this with loyalty, devotion to duty, even cheerfulness, and the nation's admiration and gratitude to these men and women knows no bounds.
But how do the Government propose to honour this debt of gratitude? Sad to say, they propose an insult. Last year the Prime Minister slipped in his announcement about Armed Forces pay surreptitiously in a Written Answer to a planted Question. But that was before the broadcasting of Parliament. This year, almost every Service man and his wife heard the Prime Minister live on the radio telling them that they had received a "square deal" and should be grateful for it.
Since that announcement, I have had the opportunity of visiting British Forces in Germany and I must say that the Service men could not believe their ears at the cavalier way in which the Prime Minister, with scarcely a passing word of thanks, informed them that, although common justice would require that they should be given increases of "up to 38 per cent.", they would have to make do with no more than 13 per cent.
The Government have insisted that the Services have been given a square deal. But is it a square deal? The Armed Forces Pay Review Body, which in its excellent and outspoken report this year has redeemed its most inadequate report of last year, made the point that the Armed Forces should not be treated any less favourably than the rest of the community. Regrettably, and to their undying shame, this Labour Government insist that they should be treated worse.
The Chief of the Naval Staff, Sir Terence Lewin, writing in the current issue of Navy News, points out that the 32 per cent. award indicated
the extent to which you have been less favourably treated under Government pay policy than your civilian equivalents in the past two years.
Is not the Government's policy supposed to apply equally to all? How, then, have the forces fallen so far behind? It has come about because, despite all the claptrap and humbug about social justice of which we hear so much from this Government, their policy has been most unfair and most unequal in its application.
The Armed Forces have been tied down to the letter of the policy under which, since April 1975 until March this year, they had received increases totalling only 14·9 per cent., while average earnings had raced ahead by no less than 49·2 per cent.—more than three times as much.
It is well known of course—as the Prime Minister has pointed out—that on quitting office in 1974 the Tories left behind a massive shortfall in Armed Forces pay. That has been the assertion made, too, by the hon. and learned Member for Montgomery (Mr. Hooson) the only representative of the Liberal Party present all day today and by the Secretary of State. But what are the facts? The truth is

that this is just another subterfuge of the Prime Minister's.
In reply to a leading question from the Liberal Party's defence spokesman, the Prime Minister said on 25th April:
The hon. and learned Member for Montgomery has correctly called attention to the fact that in 1975 the Armed Forces Pay Review Body specifically commented that the Armed Forces had fallen seriously short as a result of pay policy in the years when the Opposition were in office."—[Official Report, 25th April 1978; Vol. 948, c. 1183.]
I have to tell the House that the Armed Forces Pay Review Body said no such thing. Anyway, the facts speak for themselves.
The 1978 report makes clear that in 1975 full comparability of pay was reestablished. It is instructive, therefore, to inquire what was the shortfall which had to be made up, and how much of that shortfall had arisen during the period of Tory Government and how much under the Labour Government.
I am obliged to the right hon. Gentleman the Minister of State for giving me the Answer, in a parliamentary reply last Friday. That reply shows that the shortfall was 29·5 per cent., and all but 2 per cent. of that figure was accounted for by the wage inflation unleashed by the Labour Government over the previous year in order to win the October 1974 election. The inflation of pay that year was 27·5 per cent. Perhaps the Prime Minister and the hon. and learned Member who speaks for the Liberal Party would now care to apologise for misleading the House on that point.
But nothing is to be achieved by haggling over the past or about who can do worse for the Armed Forces. What is important is to put this matter right. What, then, is the Government's excuse for refusing full comparability of pay now? Their answer is the pay code, and it carries with it the implication that if the forces were to be accorded the full 32 per cent. of their award, this would in some way be unfair to others. Indeed, the hon. and learned Members for Montgomery took that view on behalf of his party when he asked this afternoon whether "the risk" could be taken to give comparability to the forces before 1980 and concluded very definitely that, in his judgment, it could not.
That argument is patently false and fraudulent, for it is the same pay code


which has allowed others—indeed, the majority in our industrial society—to race far ahead of the Armed Forces, as my hon. and learned Friend the Member for Winchester (Rear-Admiral Morgan-Giles) pointed out.
Therefore, the proposition the Government are asking the House and the Armed Forces to accept is that because the Forces have fallen behind by an average of more than 15 per cent. in each of the past three years, they must now accept being kept 25 per cent. behind this year and 15 per cent. behind in the following year. In effect, if the Government have their way, the Armed Forces will have lost the equivalent of an entire year's pay between 1975 and 1980. It is wholly wrong that they should be penalised in this way.

Mr. Cronin: The hon. Gentleman is speaking very strongly about the Government's pattern of behaviour. But what the Government are doing is totally consistent with the review by the Armed Forces Pay Review Body.

Mr. Churchill: It is not, as my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) pointed out this afternoon. The Pay Review Body made its recommendations, and those recommendations were for full comparability as soon as possible. Out of deference to the Government's pay policy, it produced an alternative scheme which was in accordance with the terms of that pay policy. But it is clear to anyone reading the report that if the matter were left to the Review Body it would favour full comparability now.
It seems that there has been a "mischief-maker" abroad who has leaked to the Press, or at least to the Review Body, the fact that the emperor has no clothes. An elaborate exercise is now being mounted on the instructions of Emperor Jim himself, who wishes it to be made clear that any suggestion that Socialist pay policy is unfair is totally without foundation, and that if any group publicly claims to have fallen behind by "up to 38 per cent." it must be punished for lçsemajestç of the Socialist State.
It is not as if the men and women of whom we speak are in any way well-to-do. The great majority subsist on less than average earnings. For example, this very night there are soldiers patrolling the

streets of Belfast who, after their pay rise, after the doubling of the Northern Ireland allowance, are being paid no more than 50p per hour before tax, for working a 110-hour week—and that to face IRA bullets.
In our debate on 9th December I defied the Minister of State to find one capitalist employer so hard-faced, so demanding and so mean as the Secretary of State for Defence. I gave the undertaking that if he could, I would be the first to stand in that picket line. I renew that challenge to him tonight.
Perhaps, in passing, the Minister of State would explain why the food charges for the forces have been increased by more than 20 per cent. this year, when only this evening I received a reply from the Minister of Prices and Consumer Protection which makes it clear that in the 12 months to April 1978 the retail food index increased by only 6·3 per cent.—one-third of the amount by which the right hon. Gentleman is planning to increase the food charges.
In last year's Armed Forces pay debate, the Secretary of State concluded his speech with a solemn undertaking:
it is our intention that the rigid nature of the first two pay rounds, which have produced distortion in some pay structures in the professions, industry and other fields, including the Armed Forces, will—although we do not know yet the shape of round 3—be put right in future rounds of the policy. I shall ensure that the needs of the Armed Forces are taken into Account. I also give that assurance to the House."—[Official Report, 16th June 1977; Vol. 933, c. 610]
The Secretary of State has utterly failed to deliver on that undertaking, and the course of honour requires that he should resign. I doubt that anyone would insist that he, unlike certain officers in the Royal Air Force, should stay on in his post for eight years.
The Armed Forces Pay Review Body administered a stinging rebuke to the Secretary of State when it declared in paragraph 55 of its report:
we cannot but be dismayed by the absence of further flexibility in a form that is directly relevant to the armed forces pay system. We focused attention on the need for this in our Sixth Report.
Yet once again the Secretary of State has failed to protect the interests of those for whom he has the honour to be responsible.
The Secretary of State and the Prime Minister assure us that the Armed Forces have got the best possible settlement under stage 3 with their 12·8 per cent. Indeed, the Prime Minister declared on 25th April that these increases of £6 to £8 per week for a private and £9 to £11 per week for a sergeant
should not be sneezed at." [Official Report, 25th April 1978; Vol. 948, c. 1182.]
But is it really the very best settlement possible? Some seem to be doing rather better. For example, there are the power workers with 18 per cent.
I have recently been in correspondence with the chairman of the National Coal Board, who tells me that a face-working miner has received under stage 3 an average increase of no less than £29·60. That indeed is a figure "not to be sneezed at", to use the Prime Minister's phrase. It represents an increase in gross weekly earnings of no less than 36·5 per cent. That is not only three times more than the Armed Forces' increase but it even exceeds what the forces have been promised by 1980.
Where is the fairness and the social justice in all this? Even before their productivity deal the miners were earning above average earnings while the majority of the forces were below. That is yet another case of the rich getting richer and the poor getting poorer.
I wish to make it clear that I do not grudge the miners their productivity deal. They do a skilled, arduous and dangerous job. If they dig the coal, they deserve every penny they earn.
But the Armed Forces also do a skilled, arduous and dangerous job. Why should the Government treat these two categories so differently? The answer is clear although somewhat paradoxical. With this Government it is the miners, not the forces, who mount the big guns.
The right hon. Member for Cardiff, South-East (Mr. Callaghan) may be no better a Prime Minister than the right hon. Member for Huyton (Sir H. Wilson), but he is certainly even more accomplished in the role of the Artful Dodger. He knew, when formulating the stage 3 guidelines, that if he sought to ram down the throats of the miners a miserly, miserable 12·8 per cent. there was a better-than-even money chance that the Government would have to face a fully fledged

miners' strike before the winter was out. Horror of horrors—and in an election year! The word went out forthwith from 10 Downing Street "Buy the boys off: 36 per cent. should do it."
Why should not the Armed Forces also benefit from a productivity deal? The Armed Forces Review Body says in paragraph 56 of its report:
We are, however, in no doubt that, in almost any other working environment, the reduction in Service manpower consequent on the Defence Review and the working flexibility inherent in the Services' capacity to take on civil emergency tasks in addition to their mililtary role would provide the basis for a productivity agreement that would have to be paid for directly in increased earnings.
It could well be that Ministers are so out of touch that they do not realise the hardship which their policies have imposed and, which, unless modified, will continue to impose for the next two years. Perhaps they have not hoisted on board the full implications for our national defences of the fact that nearly 2,000 officers—1,992 to be precise—applied to leave prematurely last year. This represents an 88 per cent. increase over the years of Conservative Government—indeed, a 110 per cent. increase in the case of the Royal Air Force. Perhaps Ministers are unaware that 20,000 Service men also decided to vote with their feet last year.
Despite the absurd attempts of Ministers to conceal the facts from the British public it has now become known that the Rhine Army is so short of manpower that 15 per cent. of even the small number of Chieftain tanks that we are allowed to have, have had to be put in mothballs because of the manpower crisis. Now all these facts are known, the Government have no excuse for not introducing forthwith a supplementary pay deal for the Armed Forces based on their unequalled productivity. The Government cannot even hide behind their very nebulous pay policy for, as the Armed Forces Review Body makes clear in paragraph 55, such a productivity scheme would be entirely
outside the requirements of the 12 months rule'.
There is no reason why the Government should not award the Armed Forces a 20 per cent. increase forthwith under such a scheme. Even if they were to do so, the forces would still be getting a stage 3 settlement less, both in cash and in percentage terms, than the miners.
How much longer are the Government going to run our defence affairs in such an Alice-in-Wonderland way that, through their failure to pay pilots the extra £1,500 per annum due to them, we are losing men whom it has cost the taxpayer, according to an interesting footnote on page 4 of the Review Body's report, £1 million each to train?
Various of my right hon. and hon. Friends have drawn attention to the way in which welfare benefits for which the Service man pays through his taxes and his earnings-related national insurance contributions are denied to him when he is serving overseas. This is a serious matter, and I hope that we shall hear more about it from the Minister of State.
But of all the allowances, none is more important than the local overseas allowance. It is of the utmost importance that the Minister should give an undertaking that there will be no adverse change in the local overseas allowance at least until full comparability of pay is restored. I hope also that the Minister will also make some comment on the important point raised by my hon. Friend the Member for Gosport (Mr. Viggers), who drew attention to the fact that NCOs are being charged tax at a very high rate indeed on their education allowance.
But, as several of my hon. Friends have pointed out, the crisis of morale in the forces derives by no means exclusively from dissatisfaction over pay. As much it stems from the collapse of our defences that they see going on around them all the time. This point was made strongly by my hon. Friends the Members for Westbury (Mr. Walters) and Richmond, Yorks (Sir T. Kitson), particularly in regard to the restrictions on training. My hon. and gallant Friend the Member for Eye (Sir H. Harrison) drew attention to the lamentable lack of modern weapons.
These men in the forces know the facts. They see the Chieftains being mothballed—indeed, they are having to do it on ministerial instructions. They know that guarding our shores tonight are fewer than 100 aircraft and that many of them are unserviceable through shortage of spare parts, which have to be cannibalised from other aircraft. We have heard of the "Few" who saved Britain in 1940, but they were a few hundred. Then we had in

Fighter Command 60 squadrons with more than 900 aircraft—10 times what we have today against a far more formidable potential enemy.
If the Chiefs of Staff appear to the Government to be somewhat frustrated and even outspoken, it is not through concern over their own pay or even solely over the pay of their men. It derives from the fact that here we have a Government the principle members of which, to use a senior officer's phrase, have been "briefed to the eyeballs" about the nature and extent of the Soviet threat yet, with utter resolution, they insist on ignoring it.
The Government have been briefed with a detail and precision never possible to Prime Ministers in the 1930s, and about an enemy thousands of times more potent than Hitler's Nazi Germany. They know that the Soviet Union has so many tanks—no fewer than 17 times as many as Hitler—that if they were put end to end they would stretch all the way from London to Edinburgh. They know that the Soviets are deploying each week four inter-continental ballistic missiles. They know that even if an entire Soviet tank army were to be removed from the group of Soviet Forces in Germany tomorrow, there would still be hundreds more Soviet tanks in East Germany than when we embarked on the mutually balanced force reduction talks in good faith.
Where is this supposed "detente" to be found? Do we find it is the Soviet Union, where those who have sought to monitor the Helsinki agreements are sentenced to brutal terms of hard labour following a rigged show trial? Do we find it is Africa of which several of my hon. Friends have spoken? Certainly no hint or murmur of detente has been communicated to the Red Army nor to the workers in the Soviet munitions factories.
The Foreign Secretary has said that the sentence on Yuri Orlov is "endangering detente". What detente? There is no detente, except in his own mind and the minds of equally feeble, woolly headed leaders in the West. How long will it be before this Government wake up from their sleeping sickness and tell the British people the truth—that now is no time to cut our defences, but it is of the utmost urgency to strengthen them?
It may have given gleeful pleasure to the Kremlin and its front men in this


House to hear that the Secretary of State had, on the Prime Minister's instruction, carpeted the Chiefs of Staff and reprimanded the Chief of the Defence Staff. But this grotesque spectacle did not amuse the British people in the least. It is shaming that men of such distinction, courage and patriotism, whose loyalty to the Crown and the British people is unquestioned, and who seek no more than to ensure that our defences are not neglected—which is both their right and their duty—should be abused and humiliated in this way by Ministers whose commitment to our defences is dubious, who leak these reprimands to the Press in order to appease those who would dismantle our defences and who would conclude a treaty of friendship with the oppressors of Yuri Orlov.

9.41 p.m.

The Minister of State, Ministry of Defence (Dr. John Gilbert): Perhaps I could start by illuminating one or two recesses for the hon. Member for Stretford (Mr. Churchill). He asked why food charges had been raised to the extent that they had been. The answer is that it is one of the recommendations of the Review Body. It appears in paragraph 45, which says:
In our view the charge is reasonable and the food that it purchases is very good value for money.
Perhaps the hon. Member has not read as far as paragraph 45.
It is difficult to reply to a debate when one is rather embarrassed on behalf of the right hon. Member for Chesham and Amersham (Sir I. Gilmour). He must have perpetrated one of his worst speeches ever. He has been attacked not only by my hon. Friends but by Members from various parties on the other side of the House. He spoke for more than a quarter of an hour before he mentioned pay, and he was rebuked by the hon. Member for Argyll (Mr. MacCormick) for a speech full of rancour.
It was not just a rancorous speech; it was a remarkable speech. The right hon. Gentleman talked of depriving the Services of sufficient equipment and spoke of the Government having disarmed the country unilaterally. It is difficult to take seriously a man who is supposed to be an expert on defence matters, although he spent only 56 days as Secretary of State, 21 of which he spent electioneering and

five more waiting for his right hon. Friend to get out of office. He knows full well that there is a major equipment programme for all three Services.
The right hon. Gentleman went on to talk about a great many Service men living in poverty and claimed that they would continue to live in poverty. I have no doubt that he was referring to those members of the Armed Forces who are entitled to family income supplement.

Sir Ian Gilmour: indicated dissent.

Dr. Gilbert: I am so glad that he has finally come off that horse. The Review Body's last report makes it clear in paragraph 17 that the extent to which Service men make use of the FIS system is sometimes presented as evidence that the earnings of those Service men are below the poverty line, and that this is a stigma. This is wrong.

Mr. Churchill: Is the Minister on FIS?

Dr. Gilbert: If the right hon. Member for Chesham and Amersham wants to say that Service men who are not on FIS are below the poverty line, then I would be very happy to be instructed by him who they are, where they are and precisely how they got there, if they are not entitled to FIS.
My hon. Friend the Member for Farnworth (Mr. Roper) mentioned FIS and the fact that it did not apply abroad. I recognise the point that he makes. Very few personnel in the Services are entitled to FIS, even in the United Kingdom. Payment of this benefit is a matter for the Department of Health and Social Security, which estimated that in December 1977 only 190 families were drawing FIS in a group including Service men, policemen, firemen and certain others. We recognise that there is hardship in some cases, but to use the extravagant language that the right hon. Gentleman used in his introductory speech today does no service to the forces, nor to their cause.

Mr. Kenneth Lewis: rose—

Dr. Gilbert: No.

Mr. Kenneth Lewis: rose—

Mr. Speaker: Order. If the Minister does not give way, the hon. Member for


Rutland and Stamford (Mr. Lewis) must resume his seat.

Dr. Gilbert: The House knows that I usually give way to an hon. Member who wants to intervene, but not to an hon. Member who walks in right at the end of the debate.

Mr. Kenneth Lewis: I sat through the early speeches of the debate, and I have been here since.

Dr. Gilbert: It is a pleasure to turn to some of the more constructive speeches, particularly that of my hon. Friend the Member for Hornchurch (Mr. Williams) who raised questions about the membership of the AFPRB, as did my hon. Friend the Member for Farnworth and my right hon. Friend the Member for Fulham (Mr. Stewart).
Membership of the AFPRB is a matter for the Prime Minister, and not for me. It has, however, always been the view of the Government that it would not be appropriate for serving members of the Armed Forces to be members of a body concerned with their own pay and conditions. Nevertheless, the membership of the AFPRB includes a retired officer with wide experience of Service pay and conditions, and the AFPRB makes visits to various Service units and establishments to hear at first hand the views of officers and of individual Service men and their wives. I believe, therefore, that the AFPRB has every opportunity to hear about grievances over Service pay and conditions, both from its visits and from formal evidence prepared by the Ministry of Defence. In fact, AFPRB commented upon this in the introduction to its 1978 report.
It is important that the AFPRB should continue to be seen as a fully independent body which is free to make its recommendations on pay and allowances for the Services, and this is best achieved without Service men actually being members of the body. However, I take seriously the point made by my hon. Friend and by my right hon. Friend the Member for Fulham about whether there ought to be closer liaison between the organised trade union movement and those responsible for making recommendations on forces' pay and conditions.

I should want to look more closely into that most helpful suggestion.
I am able to toss at least one bouquet to the right hon. Gentleman on his performance this afternoon. It was pleasant, at long last, to hear him acknowledge the value of the work of the AFPRB which, contrary to what he said, is not a puppet of this Government or of any other.
My hon. Friend the Member for Farnworth, the hon. and gallant Member for Eye (Sir H. Harrison) and the hon. Member for Plymouth, Drake (Miss Fookes) mentioned the question of the baggage allowance. This is not a satisfactory state of affairs, and I should not for one moment pretend that it was. I have made that clear in answers to Questions. We are not satisfied about the present level of entitlements, and I think that it is a reflection on all Governments that these have been virtually unchanged since the war. I do not know how that state of affairs has come about, but we intend to make improvements as soon as pay policy will permit.
I have to honour an undertaking that my hon. Friend gave to the right hon. Member for Down, South (Mr. Powell) and say a word or two about the affairs of the Ulster Defence Regiment.

Mr. Churchill: Before the right hon. Gentleman leaves the question of allowances, will he confirm that he appreciates that no allowance is more important to the forces than the local overseas allowance, and that if the Government's proposals of last year were to be implemented in October of this year the whole of the 13 per cent. pay rise would go out of the window? Will he now give a categorical undertaking that there will be no adverse change in LOA prior to full comparability?

Dr. Gilbert: What the hon. Gentleman is asking me to do is to give an undertaking with respect to the operation of a formula that was designed by his right hon. Friends, the present Opposition. It is the Government who have taken care of LOA. I am not in a position to give any guarantee on LOA—[HON. MEMBERS: "Oh".] No Minister could do so. No Minister could give a guarantee for LOA two years in advance. The hon. Member for Stretford may be obtuse enough not to recognise that, but his


right hon. Friend the Member for Chesham and Amersham recognises it perfectly well. He knows that we have protected the forces against LOA.

Mr. Philip Goodhart: rose—

Dr. Gilbert: No, I must get on. I have only 10 minutes left and I must deal with some other matters.
I am sure that the right hon. Member for Down, South will understand if I stick closely to my brief. As he knows, I am not responsible on a day-to-day basis for matters in the Province. I understand that the permanent cadre of the UDR continues to grow at a satisfactory rate, although some part of the increase is as expected at the expense of part-time personnel. We are continuing the present recruiting campaign. We recognise, as my right hon. Friend has said, that the men and women of the UDR work in the most difficult of circumstances. We have been considering whether any parts of their conditions of service need reviewing.
The waiving or abatement of accommodation or quartering charges and the award of free food for members of the Regular Army in Northern Ireland has no connection with the cost of living in the Province. The Ministry of Defence has always opposed any suggestion that special financial arrangements, with the possible exception of London where circumstances are unique, should be made to deal with the varying costs of living in different parts of the country.
We have been considering the conditions of service of those in the UDR. As a result, my right hon. Friend has approved that where UDR members are separated from their families they will be eligible for separation allowance under exactly the same rules that apply to members of the Regular Army. This improvement in their conditions of service will not normally affect large numbers of the permanent cadre, but where it does apply it could carry quite significant financial advantages.
The House will remember that in this year's pay award the rate of the separation allowance was increased by about two-thirds. When members of the UDR are on operational duties away from their homes at meal times and are able to use Service messes or canteens, they may now

be provided with meals at public expense. That will not be at the expense of their normal daily food allowance. It will bring them into line with members of the Regular Army.
I hope that I have said enough to demonstrate to the right hon. Gentleman the relationship between the remuneration of the Army and that of the UDR permanent cadre. I hope that I have been able to show that that is not affected by the introduction of the field condition allowance for the forces. The new pay scales introduced from 1st April maintain the previous ratio. However, if there are points of detail on which I have not satisfied the right hon. Gentleman. I shall be happy to do so either by correspondence or in answer to Questions.
One thing that the debate has clarified is the Opposition's final view on what forces' pay should be. The House could be excused for having a little vagueness on the subject. For example, on 14th March 1978 the hon. Member for Stretford said:
The Opposition are asking for a return to full comparability"—
[HON. MEMBERS: "Hear, hear."]—
in a time scale no less favourable than that accorded by the Government to the firemen."—[Official Report, 14th March 1978; Vol. 946, c. 362.]
I did not hear a "Hear, hear" to that, but that is what the hon. Gentleman said on that occasion. However, when it was leaked shortly before the announcement was made that that might well be what the Government were to award to the Armed Forces, the hon. Gentleman immediately upped his bid and said "Let them have full comparability today". Why not?

Mr. Churchill: Yes, why not?

Dr. Gilbert: "Why not now?" I am glad that that is still his view. We read in The Times that he was disavowed by his right hon. Friend the Leader of the Opposition. It seemed that his views were not the right hon. Lady's.

Mr. Churchill: That was before the report was published. It was known that the forces had fallen behind by up to 38 per cent. What possible justification can there be for punishing the forces over the next two years for the fact that they have fallen behind over three years?

Dr. Gilbert: I should have thought that the hon. Member for Stretford would stick to his guns if he felt that strongly about it. He said that the forces should have full comparability immediately. But then the right hon. Member for Chesham and Amersham, whom we understand is putting forward the official Conservative view, said that comparability should come over a period of two years but that the two years should end in 1979.
It is not clear who is in charge of Conservative policy in these matters. We know that the right hon. Member for Chesham and Amersham does not like dealing in figures. That is understandable when one considers the mess that he made of his attempts to tell my right hon. Friend that he should increase the defence budget by more than 1 per cent. but on a base about which no one was clear. Finally, the right hon. Gentleman gave the whole thing up and said that he wished that he had not quoted a figure in the first place. That was a stirring example of leadership if ever we saw one.
The Tory defence policy team reminds one of an ancient penny-farthing. Lest anyone has forgotten, a penny-farthing is one of those elegant contraptions on which the bigger wheel is in front and goes rather slower than the little wheel in order to cover the same distance. The difference with the Tory penny-farthing is that the little wheel is in front. We are not sure where the steering is, but we are absolutely sure where the horn is.
It must be embarrassing for the right hon. Gentleman, weekend after weekend, to see, not himself, but his hon. Friend's pictures in the papers and on television telling everyone what Tory policy is when no one is paying any attention to the somnolent and right hon. Gentleman. I am glad that the hon. Member for Stretford has woken up to that.
My right hon. Friend told the House how many Questions had been tabled on pay, conditions, re-engagements, PVR applications and recruiting in the last several weeks. The hon. Member for Stretford asked many of those Questions, as he is entitled to do. Being a fastidious

fellow, the hon. Member chose to quote from only a few of the replies that he has received. The House might be interested to hear the answer to another Question which he received a couple of days ago. He has not sought to publicise it. He asked the Secretary of State for Defence
if … he will now list the percentage increases in Armed Forces pay, average industrial earnings, Service pensions, and cost of living for the period 1st April 1977 to 1st April 1978".
The answer was that the retail price index rose by 9·1 per cent., that average earnings in manufacturing industry rose by 11·8 per cent., that the average increase in the basic military salary was 12·8 per cent., that the balance of total increase on total earnings for the Armed Forces was 13 per cent.—covering increases in major forms of additional pay. Service pensions rose by 17·7 per cent. and basic Service pensions for those retiring on or after 1st April 1978 will be increased by an average of 32 per cent.

In other words, the Services pay increases and their pension increases are far in excess of the increase in the retail price index. They are far in excess of the average increase in industrial earnings. That is contrary to all the accusations that the right hon. Member for Chesham and Amersham and the hon. Member for Stretford have made from the Dispatch Box.

As my hon. Friend the Member for Huddersfield, East (Mr. Mallalieu) made clear, the mischievous and malicious nonsense from the Opposition suggesting that hon. Members on this side of the House do not care about the country's defences—

Mr. Humphrey Atkins: rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly,
That the salary of the Secretary of State for Defence should be reduced by half:

The House divided: Ayes 267, Noes 281.

Division No. 221]
AYES
[10.00 p.m.


Adley, Robert
Awdry, Daniel
Bennett, Sir Frederic (Torbay)


Aitken, Jonathan
Bain, Mrs Margaret
Bennett, Dr Reginald (Fareham)


Alison, Michael
Baker, Kenneth
Benyon, W.


Arnold, Tom
Banks, Robert
Berry, Hon Anthony


Atkins, Rt Hon H. (Spelthorne)
Bell, Ronald
Biffen, John


Atkinson, David (Bournemouth, East)
Bendall, Vivian (Ilford North)
Biggs-Davison, John




Blaker, Peter
Hayhoe, Barney
Paisley, Rev Ian


Body, Richard
Heath, Rt Hon Edward
Pattie, Geoffrey


Boscawen, Hon Robert
Henderson, Douglas
Percival, Ian


Bowden, A. (Brighton, Kemptown)
Hicks, Robert
Peyton, Rt Hon John


Boyson, Dr Rhodes (Brent)
Higgins, Terence L.
Pink, R. Bonner


Braine, Sir Bernard
Hodgson, Robin
Prentice, Rt Hon Reg


Brittan, Leon
Holland, Philip
Price, David (Eastleigh)


Brooke, Peter
Hordern, Peter
Prior, Rt Hon James


Brotherton, Michael
Howell, David (Guildford)
Pym, Rt Hon Francis


Brown, Sir Edward (Bath)
Howell, Ralph (North Norfolk)
Raison, Timothy


Bryan, Sir Paul
Hunt, David (Wirral)
Rathbone, Tim


Buchanan-Smith, Alick
Hunt, John (Bromley)
Rees, Peter (Dover &amp; Deal)


Buck, Antony
Hurd, Douglas
Rees-Davies, W. R.


Budgen, Nick
Irving, Charles (Cheltenham)
Reid, George


Bulmer, Esmond
James, David
Renton, Rt Hon Sir D. (Hunts)


Burden, F. A.
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Renton, Tim (Mid-Sussex)


Butler, Adam (Bosworth)
Jessel, Toby
Rhodes, James R.


Carlisle, Mark
Johnson Smith, G. (E Grinstead)
Rhys Williams, Sir Brandon


Channon, Paul
Jones, Arthur (Daventry)
Ridley, Hon Nicholas


Churchill, W. S.
Joseph, Rt Hon Sir Keith
Rifkind, Malcolm


Clark, Alan (Plymouth, Sutton)
Kaberry, Sir Donald
Roberts, Wyn (Conway)


Clark, William (Croydon S)
Kellett-Bowman, Mrs Elaine
Rodgers, Sir John (Sevenoaks)


Clarke, Kenneth (Rushcliffe)
Kershaw, Anthony
Rossi, Hugh (Hornsey)


Cooke, Robert (Bristol W)
Kilfedder, James
Rost, Peter (SE Derbyshire)


Cope, John
Kimball, Marcus
Royle, Sir Anthony


Cormack, Patrick
King, Evelyn (South Dorset)
Sainsbury, Tim


Corrie, John
King, Tom (Bridgwater)
Scott, Nicholas


Costain, A. P.
Kitson, Sir Timothy
Scott-Hopkins, James


Crawford, Douglas
Knight, Mrs Jill
Shaw, Giles (Pudsey)


Critchley, Julian
Knox, David
Shaw, Michael (Scarborough)


Crowder, F. P.
Langford-Holt, Sir John
Shelton, William (Streatham)


Davies, Rt Hon J. (Knutsford)
Latham, Michael (Melton)
Shepherd, Colin


Dodsworth, Geoffrey
Lawson, Nigel
Shersby, Michael


Douglas-Hamilton, Lord James
Lester, Jim (Beeston)
Silvester, Fred


Drayson, Burnaby
Lewis, Kenneth (Rutland)
Sims, Roger


du Cann, Rt Hon Edward
Lloyd, Ian
Sinclair, Sir George


Durant, Tony
Loveridge, John
Smith, Dudley (Warwick)


Dykes, Hugh
Luce, Richard
Smith, Timothy John (Ashfield)


Eden, Rt Hon Sir John
McAdden, Sir Stephen
Speed, Keith


Edwards, Nicholas (Pembroke)
MacCormick, Iain
Spence, John


Elliott, Sir William
McCrindle, Robert
Spicer, Michael (S Worcester)


Ewing, Mrs Winifred (Moray)
Macfarlane, Neil
Sproat, Iain


Eyre, Reginald
MacGregor, John
Stainton, Keith


Fairbairn, Nicholas
MacKay, Andrew (Stechford)
Stanbrook, Ivor


Fairgrieve, Russell
Macmillan, Rt Hon M. (Farnham)
Stanley, John


Farr, John
McNair-Wilson, M. (Newbury)
Steen, Anthony (Wavertree)


Fell, Anthony
McNair-Wilson, P. (New Forest)
Stewart, Donald (Western Isles)


Finsberg, Geoffrey
Madel, David
Stewart, Ian (Hitchin)


Fisher, Sir Nigel
Marshall, Michael (Arundel)
Stokes, John


Fletcher, Alex (Edinburgh N)
Marten, Neil
Stradling, Thomas, J.


Fookes, Miss Janet
Mates, Michael
Tapsell, Peter


Forman, Nigel
Mather, Carol
Taylor, R. (Croydon NW)


Fowler, Norman (Sutton C'f'd)
Maude, Angus
Taylor, Teddy (Cathcart)


Fox, Marcus
Maudling, Rt Hon Reginald
Tebbit, Norman


Fraser, Rt Hon H. (Stafford &amp; St)
Mawby, Ray
Temple-Morris, Peter


Fry, Peter
Maxwell-Hyslop, Robin
Thatcher, Rt Hon Margaret


Galbraith, Hon T. G. D.
Mayhew, Patrick
Thomas, Rt Hon P. (Hendon S)


Gardiner, George (Reigate)
Meyer, Sir Anthony
Thompson, George


Gardner, Edward (S Fylde)
Miller, Hal (Bromsgrove)
Townsend, Cyril D.


Gilmour, Rt Hon Ian (Chesham)
Mills, Peter
Trotter, Neville


Gilmour, Sir John (East Fife)
Miscampbell, Norman
van Straubenzee, W. R.


Glyn, Dr Alan
Mitchell, David (Basingstoke)
Vaughan, Dr Gerard


Godber, Rt Hon Joseph
Moate, Roger
Viggers, Peter


Goodhart, Philip
Monro, Hector
Wakeham, John


Goodhew, Victor
Montgomery, Fergus
Walder, David (Clitheroe)


Goodlad, Alastair
Moore, John (Croydon C)
Walker, Rt Hon P. (Worcester)


Gorst, John
More, Jasper (Ludlow)
Wall, Patrick


Gow, Ian (Eastbourne)
Morgan, Geraint
Walters, Dennis


Gower, Sir Raymond (Barry)
Morgan-Giles, Rear-Admiral
Warren, Kenneth


Grant, Anthony (Harrow C)
Morris, Michael (Northampton S)
Watt, Hamish


Gray, Hamish
Morrison, Charles (Devizes)
Weatherill, Bernard


Grieve, Percy
Morrison, Hon Peter (Chester)
Wells, John


Griffiths, Eldon
Mudd, David
Welsh, Andrew


Grist, Ian
Neave, Airey
Whitelaw, Rt Hon William


Grylls, Michael
Nelson, Anthony
Whitney, Raymond (Wycombe)


Hall-Davis, A. G. F.
Neubert, Michael
Wiggin, Jerry


Hamilton, Archibald (Epsom &amp; Ewell)
Newton, Tony
Wood, Rt Hon Richard


Hamilton, Michael (Salisbury)
Normanton, Tom
Young, Sir G. (Ealing, Acton)


Hampson, Dr Keith
Nott, John
Younger, Hon George


Hannam, John
Onslow, Cranley



Harrison, Col Sir Harwood (Eye)
Oppenheim, Mrs Sally
TELLERS FOR THE AYES:


Haselhurst, Alan
Osborn, John
Mr. Spencer Le Marchant and


Hastings, Stephen
Page, John (Harrow West)
Mr. Michael Roberts.


Havers, Sir Michael
Page, Rt Hon R. Graham (Crosby)



Hawkins, Paul
Page, Richard (Workington)





NOES


Abse, Leo
Fitch, Alan (Wigan)
Marks, Kenneth


Allaun, Frank
Fitt, Gerard (Belfast W)
Marshall, Dr Edmund (Goole)


Anderson, Donald
Flannery, Martin
Marshall, Jim (Leicester S)


Archer, Peter
Fletcher, Ted (Darlington)
Maynard, Miss Joan


Armstrong, Ernest
Foot, Rt Hon Michael
Meacher, Michael


Ashley, Jack
Ford, Ben
Mellish, Rt Hon Robert


Ashton, Joe
Forrester, John
Mikardo, Ian


Atkins, Ronald (Preston N)
Fowler, Gerald (The Wrekin)
Millan, Rt Hon Bruce


Atkinson, Norman
Fraser, John (Lambeth, N'w'd)
Miller, Dr M. S. (E Kilbride)


Barnett, Guy (Greenwich)
Freeson, Rt Hon Reginald
Mitchell, Austin


Barnett, Rt Hon Joel (Heywood)
George, Bruce
Mitchell, R. C. (Soton, Itchen)


Bates, Alf
Gilbert, Rt Hon Dr John
Molloy, William


Bean, R. E.
Ginsburg, David
Moonman, Eric


Beith, A. J.
Golding, John
Morris, Alfred (Wythenshawe)


Benn, Rt Hon Anthony Wedgwood
Gould, Bryan
Morris, Rt Hon Charles R.


Bennett, Andrew (Stockport N)
Gourlay, Harry
Morris, Rt Hon J. (Aberavon)


Bidwell, Sydney
Graham, Ted
Moyle, Roland


Bishop, E. S.
Grant, John (Islington C)
Mulley, Rt Hon Frederick


Blenkinsop, Arthur
Grimond, Rt Hon J.
Murray, Rt Hon Ronald King


Boardman, H.
Grocott, Bruce
Newens, Stanley


Booth, Rt Hon Albert
Hamilton, W. W. (Central Fife)
Noble, Mike


Boothroyd, Miss Betty
Hardy, Peter
Oakes, Gordon


Bottomley, Rt Hon Arthur
Harrison, Rt Hon Walter
Ogden, Eric


Boyden, James (Bish Auck)
Hart, Rt Hon Judith
O'Halloran, Michael


Bradley, Tom
Hattersley, Rt Hon Roy
Orbach, Maurice


Bray, Dr Jeremy
Hayman, Mrs Helene
Orme, Rt Hon Stanley


Broughton, Sir Alfred
Healey, Rt Hon Denis
Ovenden, John


Brown, Hugh D. (Provan)
Heffer, Eric S.
Padley, Walter


Brown, Robert C. (Newcastle W)
Hooson, Emlyn
Palmer, Arthur


Buchan, Norman
Horam, John
Park, George


Butler, Mrs Joyce (Wood Green)
Ho well, Rt Hon Denis (B'ham, Sm H)
Parker, John


Callaghan, Rt Hon J. (Cardiff SE)
Howells, Geraint (Cardigan)
Pavitt, Laurie


Callaghan, Jim (Middleton &amp; P)
Hoyle, Doug (Nelson)
Pendry, Tom


Campbell, Ian
Huckfield, Les
Phipps, Dr Colin


Canavan, Dennis
Hughes, Rt Hon C. (Anglesey)
Prescott, John


Cant, R. B.
Hughes, Mark (Durham)
Price, C. (Lewisham W)


Carmichael, Neil
Hughes, Robert (Aberdeen N)
Price, William (Rugby)


Carter, Ray
Hughes, Roy (Newport)
Radice, Giles


Carter-Jones, Lewis

Rees, Rt Hon Merlyn (Leeds S)


Cartwright, John
Hunter, Adam
Richardson, Miss Jo


Clemitson, Ivor
Irving, Rt Hon Sir A. (Edge Hill)
Roberts, Albert (Normanton)


Cocks, Rt Hon Michael (Bristol S)
Irving, Rt Hon S. (Dartford)
Roberts, Gwilym (Cannock)


Cohen, Stanley
Jackson, Miss Margaret (Lincoln)
Robinson, Geoffrey


Coleman, Donald
Janner, Greville
Roderick, Caerwyn


Concannon, Rt Hon John
Jay, Rt Hon Douglas
Rodgers, George (Chorley)


Conlan, Bernard
Jeger, Mrs Lena
Rodgers, Rt Hon William (Stockton)


Cook, Robin F. (Edin C)
Jenkins, Hugh (Putney)
Rocker, J. W.


Corbett, Robin
John, Brynmor
Roper, John


Cowans, Harry
Johnson, Walter (Derby S)
Rose, Paul B.


Cox, Thomas (Tooting)
Jones, Alec (Rhondda)
Ross, Rt Hon W. (Kilmarnock)


Craigen, Jim (Maryhill)
Jones, Barry (East Flint)
Rowlands, Ted


Crawshaw, Richard
Jones, Dan (Burnley)
Ryman, John


Cronin, John
Judd, Frank
Sandelson, Neville


Crowther, Stan (Rotherham)
Kaufman, Gerald
Sedgemore, Brian


Cryer, Bob
Kelley, Richard
Selby, Harry


Cunningham, G. (Islington S)
Kerr, Russell
Sever, John


Cunningham, Dr J. (Whiteh)
Kilroy-Silk, Robert
Shaw, Arnold (Ilford South)


Dalyell, Tam
Kinnock, Neil
Sheldon, Rt Hon Robert


Davidson, Arthur
Lambie, David
Shore, Rt Hon Peter


Davies, Bryan (Enfield N)
Lamborn, Harry
Silkin, Rt Hon John (Deptford)


Davies, Rt Hon Denzil
Latham, Arthur (Paddington)
Silkin, Rt Hon S. C. (Dulwich)


Davies, Ifor (Gower)
Leadbitter, Ted
Sillars, James


Davis, Clinton (Hackney C)
Lestor, Miss Joan (Eton &amp; Slough)
Silverman, Julius


Deakins, Eric
Lever, Rt Hon Harold
Skinner, Dennis


Dell, Rt Hon Edmund
Lewis, Ron (Carlisle)
Smith, John (N Lanarkshire)


Dempsey, James
Litterick, Tom
Snape, Peter


Dewar, Donald
Lomas, Kenneth
Spearing, Nigel


Doig, Peter
Loyden, Eddie
Spriggs, Leslie


Dormand, J. D.
Luard, Evan
Stallard, A. W.


Douglas-Mann, Bruce
Lyon, Alexander (York)
Steel, Rt Hon David


Duffy, A. E. P.
Lyons, Edward (Bradford W)
Stewart, Rt Hon M. (Fulham)


Dunn, James A.
Mabon, Rt Hon Dr J. Dickson
Stoddart, David


Dunnett, Jack
McCartney, Hugh
Stott, Roger


Dunwoody, Mrs Gwyneth
McDonald, Dr Oonagh
Strang, Gavin


Eadie, Alex
McElhone, Frank
Strauss, Rt Hon G. R.


Edge, Geoff
MacFarquhar, Roderick
Summerskill, Hon Dr Shirley


Ellis, John (Brigg &amp; Scun)
McGuire, Michael (Ince)
Swain, Thomas


English, Michael
MacKenzie, Gregor
Thomas, Jeffrey (Abertillery)


Evans, Fred (Caerphilly)
Maclennan, Robert
Thomas, Mike (Newcastle E)


Evans, Ioan (Aberdare)
McMillan, Tom (Glasgow C)
Thomas, Ron (Bristol NW)


Evans, John (Newton)
Madden, Max
Thorne, Stan (Preston South)


Ewing, Harry (Stirling)
Magee, Bryan
Thorpe, Rt Hon Jeremy (N Devon)


Faulds, Andrew
Mahon, Simon
Tierney, Sydney


Fernyhough, Rt Hon E.
Mallalieu, J. P. W.
Tilley, John (Lambeth, Central)







Tinn, James
Weitzman, David
Wilson, William (Coventry SE)


Tomlinson, John
Wellbeloved, James
Wise, Mrs Audrey


Tomney, Frank
White, Frank R. (Bury)
Woodall, Alec


Torney, Tom
White, James (Pollok)
Woof, Robert


Tuck, Raphael
Whitehead, Phillip
Wrigglesworth, Ian


Urwin, T. W.
Whitlock, William
Young, David (Bolton E)


Varley, Rt Hon Eric G.
Willey, Rt Hon Frederick



Walker, Harold (Doncaster)
Williams, Alan (Swansea W)
TELLERS FOR THE NOES:


Walker, Terry (Kingswood)
Williams, Alan Lee (Hornch'ch)
Mr. James Hamilton and


Watkins, David
Williams, Rt Hon Shirley (Hertford)
Mr. Joseph Harper.


Watkinson, John
Williams, Sir Thomas (Warrington)



Weetch, Ken
Wilson, Rt Hon Sir Harold (Huyton)



Question accordingly negatived.

Orders of the Day — INDUSTRY (FINANCIAL ASSISTANCE)

10.17 p.m.

The Minister of State, Department of Industry (Mr. Alan Williams): I beg to move,
That the draft Financial Assistance for Industry (Increase of Limit) Order 1978, which was laid before this House on 28th April, be approved.
This order will have the effect of increasing the limit under Section 8 of the Industry Act from the present figure of £850 million to £1,100 million. Hon. Members will recollect that under that Act the initial tranche of grant was raised to £600 million, with the possibility of four further grants each of £250 million. On 27th June last year the House approved the first such tranche. Therefore, since June we have had £850 million available.
I wish first to repeat the explanation which the House has had before, since this is relevant to the assessment of the need for this order. In arriving at our aggregate under the Act we take into account not only the sums paid but liabilities such as guarantees which have been entered into and which may become future calls on the finance available. But we deduct from this the payment of loans or principal sums in relation to guarantees. It follows that since the guarantees are merely possible calls on resources and since loans and grants are phased over the period of the development of the project, commitments would at any time normally run substantially ahead of and above the level of actual payments. Payments under the legislation at the moment amount to £330 million but commitments amount to £775 million. Therefore, at this stage we have £75 million of the current tranche available. I shall explain to the House why the extra amount is needed.
Of the commitments that have already been entered into about half relate to individual companies and nearly £390 million is attributed to various Section 8 schemes, namely, the off-shore scheme, accelerated projects, selective investment and the 15 sectoral industry schemes. I think that I owe it to the House to explain what has happened in terms of commitments

within the last 11 months since the approval was given to the last tranche. The new commitments during this period amount to £275 million. Of this, £150 million went towards Leyland's capital reconstruction, which was approved by the House without a Division. Under the sectoral schemes, £90 million has been further committed, £20 million under the selective investment scheme and £15 million on the offshore investment scheme.
I apologise for the fact that my speech will be fairly statistical. When the matter was previously debated the House showed an almost masochistic wish for facts and statistics. I shall impose the suffering at this stage and trust that we shall get down to the political hurly-burly later.
As hon. Members will be aware, the sectoral schemes are intended, first, to deal with historic weaknesses in certain sectors of industry, such as textiles and footwear, emergent weaknesses such as those appearing in instrumentation and automation, and in the electronics sector, when we see what is happening in competitor nations overseas. The sectoral schemes are also intended to meet the requirements of the EEC and to provide adjustment finance. This is the case with the poultry scheme and with the red meat scheme, both of which are to help to meet the hygiene standards which have to be conformed to under the EEC regulations. The sectoral schemes are also intended to encourage the use of indigenous resources. This is the thesis behind the paper and board scheme, which is intended to encourage the use of domestic waste paper.
Under the sectoral schemes, £141 million has been offered to companies for 1,300 projects and these projects are worth £675 million. So virtually five times the project value has arisen from the offer that has been made by the Government. We still have over 1,000 applications in consideration under the various sectoral headings, and seven of these schemes remain open.
I shall give the House an up-to-date report on a few of the schemes. I shall not go through every one of them. The ferrous foundry industry, as hon. Members from industrial constituencies will know, was grossly under-capitalised and had very out-of-date equipment yet played


a key role in supplying components to other industries which are essential if we are to attain our marketing objectives under the industrial strategy. By the completion £78 million was offered under the ferrous foundries scheme, generating £360 million worth of investment, which will lead to the modernisation of 350 foundries in this country. This has been one of the most successful of all the schemes and one of the most important in its strategic role in relation to other industries to which it is a feeder industry.
Similarly, after a disappointingly slow start, the machine tool industry scheme has become another major success. A total of £16 million has been committed so far in support of 150 projects which will give rise to £80 million worth of investment in the industry. It is particularly encouraging that one-third of these projects are in support of new products. I am sure that this will be encouraging to hon. Members who have been aware of the shortcomings of our machine tool industry in bringing on new products over decades.
We still have a further 230 schemes under consideration in the machine tool industry and the result is that the industry now has a higher projected investment for the current year than it has had for any of the last eight years. That is a notable achievement in a sector where we would all wish to see further investment.

Mr. Kenneth Clarke: I had hoped that the Minister had finished touching on one or two of the sectoral schemes, but was still anxious to give us some factual information. Could he take the opportunity to correct the impression he gave at Question Time today, that, as a result of the various schemes he is describing, the level of investment in industry in this country is higher now than it was under the Conservative Government?
The Minister obviously had in mind the trough year of 1973, but would he not agree that in 1977, the last full year, gross fixed investment in manufacturing industry in this country was substantially below the levels of 1974, 1971 and 1970, so that the schemes of investment assistance that he is outlining have not had a very encouraging effect upon the level of investment in industry as a whole?

Mr. Williams: The hon. Gentleman seems completely to misunderstand the situation in relation to investment. In 1970, when the then Chancellor made, unfortunately, one of his last speeches from this Dispatch Box, almost the first announcement of the incoming Conservative Administration was that investment grants would be abandoned. That decision could not have come at a worse time. It looked as though investment might have been reaching a plateau anyway and the switch to an allowance system, which was dependent on high profits, when the country was faced with the possibility of a downturn in investment, was an incredible error of judgment.
Investment under the Conservative Government never equalled the level it attained, in real terms, in 1970. It slipped in 1971 and 1972 and was much the same in 1973. Far from my having misled the House, I reiterate what I said earlier. In 1972 and 1973, when the then Chancellor of the Exchequer had indulged in a catastrophic policy of taking off all credit controls, which drew in all the imports and destroyed our balance of payments and when the Government were going for growth and world economy was buoyant, the level of investment in those last two full years of the Conservative Government was lower than the level of last year. I accept that it was only marginally lower, but it was lower in a context of buoyant world trade, compared with last year's context of the worst recession since the 1930s. Whatever the hon. Member for Rushcliffe (Mr. Clarke) does, he should not lecture us on investment, because our record is far better than that of the Conservatives.
I apologise for diverging somewhat, and I now return to the order before us. Seven of the schemes are still open, and certain of them are due to conclude—I say "due to", but there are always possibilities that some of them may need to be extended—in June and July of this year.
We are pleased that the paper and board scheme, which is one of the schemes still open, to ensure use of indigenous waste materials, has already attracted considerable support, and £12 million has been offered under it. Forty projects are under support, and the import saving from projects already in hand will amount to £100 million a year. Regardless of one's view—I know their


views on industry schemes—I should have thought that the Opposition would welcome the contribution which is being made by this scheme to the positive side of our balance of payments.
The recent schemes—instrumentation and automation, drop forging and footwear—have all made encouraging starts. I am sure that the House will accept that we are at an early stage in the sense that what tends to happen is that it takes companies several months to evaluate the possibilities for themselves under a scheme, they then submit their proposals, and we usually get a surge of proposals towards the closing date of a scheme.

Mr. Stephen Ross: Do the Government intend to lower the limit of £500,000 which, I think, applies to Section 8 schemes? I have in mind an electronics components firm in my constituency where I saw only today a very worthwhile export project. Manufacture can be done in America and the company in this country would merely get royalties, but it would rather manufacture here. But the scheme is worth only £70,000 to £100,000.

Mr. Williams: If the hon. Gentleman would care to telephone my office tomorrow morning with the details, I shall look at it, because the £500,000 applies to only one of the schemes in operation. The threshold in each sectoral scheme is pitched at a level which is relevant to the individual industry sector. For example, in the case of clothing—I am speaking from memory here—I think that it is down around the £10,000 mark, because one is dealing with very small firms which will be putting forward relatively small projects.
A further point which is not always realised is that companies do not have to put forward a single project to meet the threshold. They can roll together a programme for the next two or three years and, as long as that meets the threshold level, they will qualify for support. But I shall gladly look at the proposition if the hon. Gentleman will telephone my office.

Mr. Max Madden: My right hon. Friend mentioned the clothing scheme. As he rightly said, the original scheme made a most disappointing start and the threshold was lowered. Can he

say what the response to the scheme is now, because it has been in operation for quite some time?

Mr. Williams: I know of the interest in my hon. Friend's constituency in just this scheme, and I can tell him that 425 projects have now been approved under this sector scheme. The Government have offered £7½ million, giving rise to £31 million of investment in a sector of the industry which desperately needed extra investment. There are 550 more projects under consideration, so that virtually 1,000 companies stand to benefit under this scheme.
I am sure that that will be welcome news to my hon. Friend, and welcome to the House also, perhaps, will be the fact that many of the projects are from small firms for consultancy support. This is a facility which has not in the past always been available to them, and our assessment of those projects currently approved is that there will be not only substantial new investment in this section but higher productivity.
If I may revert for a moment to the scheme to which the hon. Member for Isle of Wight (Mr. Ross) referred, there are several schemes within the electronics sector, and the threshold of those would be way below the £500,000, but the scheme which has the threshold of £500,000 is the selective investment scheme. This is for major projects which will have significant economic benefit for the country, and these projects have to be on a different time scale or on a different investment scale or of a different nature from what they would have been had the scheme not been in operation.
The allocation has had to be increased from £100 million to £125 million to meet the prospective demand. Already £34 million has been approved under the scheme, including the £20 million in the past 11 months to which I referred, and 66 projects have been supported which will give rise to £340 million-worth of investment.
Therefore, although there is still much more to come, the scheme is already a major generator of new nationally important investment. Indeed, there are another 154 schemes under consideration and if they are all approved—I would not suggest that they will; a substantial number are turned down because they may


not meet the criterion of additionality—they will give rise to another £1,600 million worth of investment. With that has been approved and what is under consideration, there is £2,000 million-worth of investment projects arising from the scheme and more projects are expected to appear in the future, because we are not yet at the closing date. Those already approved will have a positive balance of payments benefit of £200 million a year.
I turn finally, because I know that this matter is of interest and concern to hon. Members on both sides of the House, to the employment and investment benefits of Section 8 schemes. I must emphasise that, as I pointed out at Question Time, they are not in themselves linked to job creation. Job creation is incidental rather than the prime purpose, which is to achieve higher efficiency and higher productivity, and in some sectors and on some individual investments this may actually work against employment levels.
It is important to stress that in applying these schemes and in making firms more competitive and improving their productivity we therefore secure the jobs of those who remain in the industry. Far from having a negative effect on total employment, the schemes have given rise, though they are not specifically intended to do so, to 22,000 prospective new jobs. They will also preserve or give rise to jobs in those supplying industries from which the firms will order their plant, equipment and buildings. The departmental estimate is that 170,000 man-years of work will arise from the orders that will be placed with suppliers in the United Kingdom to meet the needs of those receiving the grants under the scheme.

Mr. Giles Shaw: Will the right hon. Gentleman comment on how far he is satisfied that, with schemes under the section proceeding, his colleagues in the Department of Trade are seized of the important consequences? Does he not agree that in many instances, certainly in wool textiles, for example, industry schemes have been enacted but problems have arisen in trading arrangements which may make the investment abortive?

Mr. Williams: I am sure that the hon. Gentleman will have noted with pleasure the success of the Governments of the Common Market in the recently agreed Multi-Fibre Arrangement. He will know that the industry, both on the employers'

and the trade union side, has gone out of its way publicly to express thanks and congratulations to the Government and to the EEC negotiators for the form of that agreement. They feel that the MFA as now negotiated gives them the breathing space in which they can begin to exploit the competitive edge which their investments under the wool textile scheme, mark I and mark II, have given. Therefore, I think that the hon. Gentleman can be assured that we are well apprised of these needs and have already acted upon them, particularly at the request of a sector working party under the industrial strategy, which for some reason is so disparaged by Conservative Members.
I re-emphasise the point that, despite the world recession, these schemes have given rise to £1½ billion worth of investment. Yet Conservative Members, purporting to care about investment, clearly intend to vote against this legislation tonight. This level of investment means that, for example, last year, when we deduct iron and steel, investment in the United Kingdom, in the depths of international depression, rose by 14 per cent. Manufacturing investment is expected to rise by between 10 per cent. and 13 per cent. during the current year.
It seems that the Opposition are absolutely intent on repeating the follies of 1970. I listen to the comments of the Opposition Front Bench spokesmen and it seems that, like us, they do not wish to support firms which cannot be viable. On the other hand, however, they say that if a firm is viable they do not want to give it support. I find it difficult to understand the logic of their analysis. Their policy is never fully spelled out.
Industrialists in this country and abroad frequently ask me what on earth is the policy of the alternative Government and I have to tell them that I have no idea. I only know that if the thinking which is expressed from the Opposition Front Bench were carried through, the Ford development would now be taking place in Southern Ireland and not in this country.
Under the legislation we have commitments of £775 million, which leaves only £75 million under the present tranche. Potential commitments under the existing selective investment scheme and the sectoral schemes—that is, taking account of those applications which are in, but


not yet fully processed—amount to about £225 million. We are likely to be £150 million short of requirements, even assuming that there is no further demand on the off-shore supply scheme—and I would have thought that it is highly likely that there will be some—and assuming that there are no extensions of these schemes or that thereis no requirement for funds outside purposes such as, for example, substantial rescue cases.
I hope that the House will appreciate that we are going through a ritualistic process involving the Conservatives in which they blindly seek to destroy one of the most successful instruments of policy, an instrument which has worked despite the efforts of those who introduced it. The Industry Act was introduced by a Conservative Government. Having introduced it, the Conservatives have the impudence to boast from their Front Bench that by the time they left office they had spent only £10 million under the Section 8 powers. That, perhaps, explains why investment collapsed under the Conservative Administration.

10.43 p.m.

Mr. Kenneth Clarke: I agree with the Minister that the Government are spending money under Section 8 of the Industry Act so quickly that we are in danger of getting into an annual ritual with these orders, with the Government coming back for more money. Although the Minister has updated the contents of his speech, the style remains the same in that there is a series of statistical claims updated for the various sector schemes which the Government are sponsoring under Section 8.
The Minister then concluded with the same peroration as last year by affecting to express disbelief at our voting against the order. He says that somehow we are seeking to damage the level of investment of successful industry. The Minister knows that that is not the case. He knows why we are against this order. We oppose it because of the amount of taxpayers' money involved, which is being fed directly into industry. We are in no way opposed, at all times and in all circumstances on principle, to the application of public funds for investment in industry. We feel, however, that the need for grants of taxpayers' money to industry of any kind will arise only in

rare and special cases. We believe that if the economic climate were put right, the need would dwindle almost to vanishing point, because the market would satisfy the needs of successful industry.
We are certainly opposed—[Interruption.] With respect, the Under-Secretary of State does not know his figures as well as the Minister does. He does not know that the Minister consistently leaves out the year 1974, when the Conservatives left office. When the present Government get back to the levels of investment achieved during the year we left office, he will be more entitled to sit there and laugh.
In our opinion it is right to oppose the profligate pouring of taxpayers' money into sectors of industry chosen by Ministers and civil servants to the tune of £250 million each year. That is what this order represents. We believe that what industry needs above all else is not ever-greater expenditure on grants of this kind, but a reduction in its tax burden. That is the main way to stimulate industry and stimulate investment in industry. Unnecessary spending and borrowing by Government, even on Industry Act aids under the so-called industrial strategy, actually prevent that stimulus.
This year we have additional reasons for voting against the order. There has been a change of policy since last year, which was not even remotely touched on by the Minister. We are particularly hostile to the way in which the Government propose to disburse these Industry Act funds from now on, because grants to projects which otherwise would qualify under all the criteria laid down in the 1972 Act are now being refused where applicants will not accept the pay policy conditions which the Government lay down. So the amount the House is being asked to approve of this year will not only be expended in large quantities under Section 8 but will be disbursed on conditions which are quite possibly illegal and which are certainly, in our view, arbitrary and unfair and an improper use of Industry Act powers.
I begin with the scale of Government expenditure, but I shall not take too long because otherwise the Front Benches will have taken too much time in the debate and I shall have fallen into the trap that the Minister fell into—that of repeating last year's speech.

Mr. Leslie Spriggs (St. Helens): rose—

Mr. Clarke: I shall not give way to the hon. Gentleman now, but a bit later on. This debate lasts only one and a half hours and the Minister took 25 minutes.
The Government have transformed our 1972 Act completely. We have no regrets about the authorship of the Act. We have no intention of seeking to repeal the Section 8 powers. But the use of these powers has been quite transformed by the Government. As the Minister has reminded us, by 1974 we had expended £6·3 million only under the powers that we had taken under Section 8, although there were, of course, commitments in addition to that.
Since that time the Act has been used as a way of pouring totally different sums of money into industry by way of direct grant. The Industry (Amendment) Act 1976 changed the overall financial limits of our 1972 Act from a total contemplated of £559 million to one of £1,900 million, and the powers that the Government took were for £600 million straight away, followed by four increases of up to £250 million each.
This is the second successive year that application has been made to the House for £250 million. So the level of expenditure involved is beyond anything contemplated by the Conservative Government, and beyond anything contemplated by the House, when the 1972 Act was passed. The Government say that it is all very valuable and necessary, and the Minister justifies this expenditure by producing dull but worthy lists of the expenditure under various projects which he hopes are calculated to appeal to the constituency interests of such Members as are in the Chamber.
We face up, of course, to the prospects of what would happen to investment if these grants were substantially reduced and the scale of expenditure were taken back to where it was contemplated. It remains our firm belief, when the Minister is talking about worthwhile investment in industry, that the overwhelming majority of the projects he has described would go ahead with financial aid from the market. The fact that the change in expenditure under Section 8 has produced no significant difference in the overall level of investment in manufacturing industry, which remains below that of

1970–71 and 1974, supports that case. We believe that there are very few projects with good commercial prospects of success that cannot raise finance in the market.
Whenever I meet industrialists who are in companies which obtain grants under Section 8 of the Industry Act, I ask them in confidence what the future would have been for the project for which they received assistance had they not received the Government grant. That is a perfectly legitimate question for an Opposition spokesman. So far I have not met a solitary industrialist who has not told me that his project would have gone ahead in any event, even without the Government investment.

Mr. J. W. Rooker: Who are they? Name them.

Mr. Clarke: Some may have deceived me, of course, and I quite accept that the rules of the scheme are supposed to be—

Mr. Alan Williams: The hon. Member has made a very serious allegation. He is alleging dishonesty with public funds by an apparently large number of firms which he has consulted. He has a responsibility to the taxpayer. Will he elaborate in greater detail how many such companies have indicated this to him out of the hundreds that have received support under the scheme? Also, what does he intend to do to ensure that abuses of the type that he alleges—of course we have no way of checking them, because he will not give us the names—are dealt with appropriately? Otherwise, he surely is conspiring in an illegal act.

Mr. Clarke: If the Government would follow their own criteria for assistance under the Industry Act with any accuracy, there might be more justification for making a request of that kind. The Minister is using his own discretion in an arbitrary way, not authorised by Parliament at all on pay policy conditions. We have consistently made this point throughout, and we believe that if he made a serious investigation into the investment policies of industry, the Minister would discover that scarcely a project exists that would not have gone ahead anyway and that is conditioned solely by the grant.
I shall try to justify what I have said by asking hon. Members opposite to contemplate the basis upon which they think


investment decisions are made by investors in industry. There is not an investor alive—or if there is, he will not make much money—who makes an investment because a Government grant is available for that particular project.
The idea that investors see the existence of the ferrous foundry scheme and think that because of that scheme they will now look for ways of investing in the modernisation of their ferrous foundry plant is a Mickey Mouse concept of how investment is made. The position is that an investor will not invest, whatever party is in office and whatever is being done through the Department of Industry, unless he first assesses his market and can see that there is a proper market for his product.
He then assesses the return on his capital and looks at the likely return to his investors in relation to the risk. He sees whether he will have satisfactory industrial relations in his firm with the new scheme that he is undertaking. He sees what improvements in his productivity he might achieve and the competitive position of his company. He looks at the economic and political climate, because any investor needs a stable and encouraging economic and political environment for investment.
Those are the criteria that any sensible investor applies to a project in his company. It is only if the answer on all those grounds is "Yes", and it is a wise decision to make the investment, that he then looks around to see whether there is any Government grant available which he can claim as a contribution towards his investment. That goes on on a considerable scale at present.
I accept that the existence of grants of one kind or another may on occasions influence the timing of an investment project and may influence the location of a project. But that is more likely to happen under Section 1 or Section 7 of the Industry Act on regional policy, not Section 8, which is all-embracing and national.
That is the essence of the process, and it means that the figures produced by the Minister, the so-called millions of pounds of investment provoked by his grants, the number of jobs created and the figures he puts upon them, are totally myth-making.

It is investment that would have gone on anyway. They are jobs that would have been created anyway.
Some industrialists selected by the right hon. Gentleman's Department and his civil servants are getting a contribution from the taxpayer towards an investment that would otherwise have been financed solely from the market. If a few investments would not have gone ahead in those circumstances, we beg leave to doubt whether they are reasonable investments. If that is not so, it means that there has to be a Section 8 scheme before such investment will go ahead.

Mr. Rooker: I only want to help the hon. Gentleman. It is within the knowledge of the House that from time to time the Front Benches correspond in private. That is supposed to be kept confidential. That is how things work in this place. I invite the hon. Gentleman to write to my right hon. Friend in confidence naming the firms that he has alleged have lied and cheated to get their hands on public money.

Mr. Clarke: The Minister in confidence, without telling me or the House, refuses grants to companies that will not abide by his pay policy conditions. They are not even allowed to know the conditions that apply. They are asked to sign blank undertakings before they get grants. There is no kind of confidential correspondence of the sort to which the hon. Gentleman refers in which I propose to indulge.
If the point of the Labour attacks is to suggest that there is some investment which would not go ahead but for the sectoral schemes under Section 8, I doubt the wisdom of that investment. Investment in itself is not an end in itself. It is not the sheer quantity of investment in industry that matters but the use of that investment in improving the position of industry.
The Government's emphasis—it was brought out again in the Minister's speech with his list of figures—on the quantity of investment regardless of the return on it has reached absurd lengths. Investment in projects that are not economically viable will not benefit the economy in the long run.
Most of the investment projects we are considering tonight are economically viable and, we hope, desirable. We need investment that will increase efficiency,


productivity and the competitiveness of our industry. That is the sort of investment that we need. However, we cannot believe that there are many industrialists who cannot finance that sort of investment from the market.
Why are we so anxious to vote against the order and thereby reduce public expenditure, to reduce to some extent—the extent of £250 million is not to be sneezed at—the Government's borrowing requirement and, I hope, to pave the way for reducing taxation? We are aiming to achieve that effect so as to regenerate British industry and to fulfil the purposes that the Minister has set out.
Sometimes a false choice is set out by Labour Members from the Prime Minister downwards, and occasionally even the Press outside, about the alternative facing Britain. The alternative is most often posed when we come to consider the use that we should make of North Sea oil revenue. The choice is meant to be whether we use the revenues to put them into industry or indulge in tax cuts. Those who pose the alternative in that way make it sound as though tax cuts will lead to some guilty squandering of the money that is available and that putting money directly into industry is a more worthwhile use to make of it.
We do not see the latter approach as an alternative in that sense if the purpose is to use what resources we have for the benefit of industry. Investment in industry and tax cuts are not alternatives in our opinion. Investment in industry will come if the climate for investment is created that is needed, and reducing taxation is one of the greatest single factors that will have to be achieved if we are to produce a climate for investment. If the climate is made right, the private investment will come forward, as it was when the Labour Government took over in 1974. The money poured directly into investment is inimical to the main purpose that the Government profess in so far as it adds to their borrowings, public expenditure and, thereby, taxation.
My final point may commend itself to Labour Members and make them worry about voting for the order. The additional feature this year is that large sums are to be disbursed in an extremely arbitrary and unfair fashion because pay policy conditions are being attached to

Industry Act grants. This was outside Parliament's contemplation when the Industry Act was passed. I can imagine the outcry if in 1972, the then Conservative Government had stated to the then Labour Opposition that it was proposed to use the discretion set out in the 1972 Act as part of a instrument of pay policy—and a covert instrument at that.
I am not concerned tonight with the merits of pay policy. I do not argue that the Government should not take a view on pay. But I argue strongly that the Industry Act was never designed for this purpose. A pay policy backed by secret sanctions is wholly undesirable and will not serve its purpose.
Industrialists who apply for assistance under the 1972 Act are supposed to turn to the criteria for assistance under that Act published in December 1975, which is available to all hon. Members. That is a comprehensive list of criteria for assistance to industry which has not been amended. It contains not a word nor hint of any use of ministerial discretion over and above that of assessing viability and the worthwhile nature of the proposed investment in order to enforce whatever might be the pay policy at that time.
Only gradually, over the past few months, have we extracted from the Government any acknowledgement of the existence of pay policy conditions when making grants to industry under Section 8. The Government began by saying that compliance with pay policy would be a factor in exercising their discretion. By that they were understood to mean that where a company had not complied with existing pay policies and was already in dispute with the Department of Employment, that would be a factor in deciding whether to make a grant. But the Government have gone far beyond that. They have never declared their policy to the House.
Now, when offers of grants under the Industry Act are being made, it is policy to attach conditions. Those conditions do not refer to compliance with past or existing pay policies. Those conditions seek an understaking that the applicant will comply with such future pay guidelines as any Government might issue. But the nature of those guidelines is of course unknown to the applicant when he makes his application.
Conditions are being attached that not only will the applicant comply, but he will take such steps as the Government direct to ensure that any sub-contractors are also brought into line with Government pay policies in the future. Those who will benefit from the £250 million for which the Government are asking this year should know that they will be expected to give a blanket understanding that they will adhere to any future pay policy. Therefore, they will have to launch into a project knowing that the grant might be stopped at any stage because the Secretary of State has decided that they are no longer complying with the pay policy. Unknown conditions are being applied to each grant.
I should have thought that hon. Members who express such concern for the clothing industry would be interested to know what conditions affecting the pay of their constituents are being attached to the grants for which they are so grateful. They might ask about the form of these conditions. They might think that there is a set form which someone can see. But there is no such form. The form of conditions is open to negotiation in each case.
Negotiations are going on as a result of an application by Schreibers under Section 7 of the Industry Act. In reply to a Question which I tabled the Under-Secretary of State said of Industry Act grants
The precise terms of individual offers are negotiated in each case with the applicant company and are not disclosed."—[Official Report, 18th May 1978; Vol. 950, c. 268.]
The position of an applicant company under this policy depends entirely upon its clout and negotiating position with the Government. Sir Arnold Weinstock, through Schreibers, which is owned by GEC, was prepared to argue about the conditions, and negotiations are proceeding. That firm made a public fuss about the conditions that it was being asked to accept. But for every giant company like GEC that is prepared to do battle there are countless small firms that will not because they fear reprisals from the Government, who are making use of their discretionary powers in such an arbitrary way, and because they may wish to apply for grant, public contracts or other Government largesse.

Mr. Kenneth Warren: Is my hon. Friend aware that the situation is far worse than he has described? American or any other foreign companies are in no way subject to these guidelines, whether they are sub-contractors or direct contractors to the Government.

Mr. Clarke: I am sure that the situation could be far worse than I described and even far worse than my hon. Friend the Member for Hastings (Mr. Warren) knows, but I am certain that the Minister will not tell us very much about it. Large sums are now being disbursed subject to these conditions. Most firms are signing on the dotted line, but the precise nature of the conditions is not being dislcosed to anyone. That is a grossly arbitrary way of operating the distribution of largesse under the Industry Act.
This sums up for us the dangers of a Government taking upon themselves the disbursement of considerable sums under the 1972 Act on a scale that was never contemplated. They realise that it provides for their machine a power and supervision over the practices of companies which they would otherwise lack. Not only are they disbursing money lavishly, about which we have complained in the past, but they are disbursing it unfairly and subject to secret conditions.
In those circumstances the burden of my case about excessive and unnecessary expenditure to stimulate investment remains the same as last year. But, unlike the Minister, I have a different peroration, because in the last year he has made his policy worse. This year we certainly have no intention of allowing £250 million of taxpayers' money to be spent not only unnecessarily but in a disgraceful manner by Ministers who are misusing their legal powers under the Act.

11.7 p.m.

Mr. Douglas Crawford: The Opposition Front Bench said it would take no more time than the Minister. The Minister took 24 minutes, and the hon. Member for Rushcliffe (Mr. Clarke) took 24 minutes.
There are many misapprehensions about what creates new jobs, which are what we are discussing tonight. There was a survey in the late 1960s by the


Scottish Council (Development and Industry) which laid out criteria for the creation and attraction of new jobs in Scotland. These were the availability of skilled labour, amenities, ease of transportation, telecommunications, grants and a thing called a common language. I can assure hon. Members that we certainly speak the common language in Scotland.
I agree with the hon. Member for Rushcliffe that grants are very low in the list of priorities. Therefore, the availability of money does not create—I emphasise that word—new jobs. It is important that the Government, the development agencies and, perhaps, the NEB realise that. It is important to realise, too, that the days of footloose industry are over. The Honeywells, the Burroughs, the NCRs, the General Motors and the IBMs will not come to the South-East or the North-West of England, to Scotland, Wales or Northern Ireland any more.
The important lesson may be learnt from the Republic of Ireland, which has discovered that industrial expansion and the creation of new jobs come from existing industries, whether they be indigenous or whether they were attracted during the 1950s and 1960s from overseas.
The availability of State money, however, may—this is why my party will vote with the Government tonight—keep existing jobs. In the short term, the job creation programme has helped to keep existing jobs.
On a second point—this refers to the Conservative Party—the existence of regional employment premium has helped to keep existing jobs, because industrialists in Scotland—I can speak only for Scotland—regarded REP as part of their current cash flow. That was very important. Perhaps the Government Front Bench will tell us tonight whether they have any alternative to REP to offer in development areas such as Scotland, and the North-East, the North-West and the West of England.
In Scotland, money does not create jobs, but it helps to keep jobs. I speak for a country called Scotland. I am delighted with the laughter of hon. Members behind me. The country for which I happen to be speaking has a higher unemployment percentage than any other

country within the British Isles, apart from Northern Ireland—if Northern Ireland is a country.

Mr. Madden: Did the hon. Member hear a BBC "World at One" programme on Sunday, in which a number of leading Scottish industrialists said that a separate Scotland would be a serious deterrent to new investment and the creation of jobs in Scotland?

Mr. Crawford: I am delighted to hear the hon. Member speak on the side of senior Scottish industrialist members of the CBI. I am very glad that the hon. Member is now taking the side of the CBI.

Mr. Robert Adley: Answer the point.

Mr. Crawford: I am answering the hon. Member for Sowerby (Mr. Madden). Once again, I am glad to have the unanimity of the Conservative and Labour Parties on Scottish self-government.
If the hon. Member for Sowerby and the House will let me proceed, I should like to say that I agree with the hon. Member on this point. Scotland has an unemployment rate of between 8 per cent. and 9 per cent.—200,000 people. It is larger than the unemployment percentage in England. I believe that it is very important for Scottish investment and employment that the Government be allowed the powers that they are seeking.
However, only with self-government shall we be able to create the long-lasting and rewarding new jobs that we need. In the short term, for Scotland—I wish the hon. Member for Glasgow, Cathcart (Mr. Taylor) would hold his horses for a minute, because, although he does not appreciate it, my party is in favour of the Government on this issue. If the hon. Member wishes to say how the Conservatives are in favour of jobs in Chrysler and British Leyland, I should be delighted to hear it.

Mr. Teddy Taylor: The hon. Member must know that when the Conservatives are in power the outlook for jobs in Scotland is always better.

Mr. Crawford: In that case, why did the Conservatives vote against additional money for Chrysler? If that had not gone


through, there would have been no jobs in Linwood tonight.

Mr. Taylor: rose—

Mr. Crawford: No, it is too late, It is for the sake of existing jobs, not for new jobs—

Mr. Taylor: rose—

Mr. Crawford: No, I am sorry. I like the hon. Member very much, but he has only just come in.
It is for the sake of existing Scottish jobs that my party will be voting for the Government motion tonight.

Mr. Adley: Margo has got the message.

Mr. Crawford: She will soon be with the hon. Member.
In his 1974 election manifesto, the hon. Member for Cathcart actually wished for a Scottish Assembly with economic powers.
We can afford the extension of the powers of the Secretary of State for Industry in the Scottish context. As I say, these powers would be even greater in the context of a Scottish Government.

11.14 p.m.

Mr. J. W. Rooker: I shall speak briefly, simply because there is not a great deal of time left. I should like to make two points.
The first concerns the issue of the conditions attached to this money. There are not enough conditions attached to it. My right hon. and hon. Friends the Ministers will know that. I should like to see attached to this money the condition that it could go only to factories that carry out good safety policies and factories that employ only competent management and not to some of the old boys from public schools who run many sectors of manufacturing industry. I should like the Government to use the money as an impetus for changing these aspects of industry. There would be no complaint from me if there were a problem in a factory, even if it were in my constituency in the West Midlands, because the pressure on the Government using that policy would bring about a change in the companies concerned.

Mr. Robert Kilroy-Silk: Does my hon. Friend also accept that a

very good condition, which the hon. Member for Rushcliffe (Mr. Clarke) did not mention, was that the amount of money going to each company should be made public? He is very concerned about the so-called "secret" clauses which companies have to sign which are not publicly known and debatable, but he makes no complaint at all about the amount of taxpayers' money going to each company and the companies themselves refusing—though the Government do not—to make those sums publicly known.

Mr. Kenneth Clarke: It is known.

Mr. Rooker: I am grateful to my hon. Friend. The hon. Member for Rushcliffe (Mr. Clarke) says that it is known. But it never was when the Conservatives were in power. It is only since this Government have been in power that details of assistance to industry have been published if it is above £25,000—which is a small sum compared with these figures. The Opposition kept secret all the money they gave to industry, with no intention of publishing it. One presumes that if they were returned to power they would still disburse some money to industry. Will they publish the amounts on a company-by-company basis?

Mr. Kilroy-Silk: They have not said so.

Mr. Rooker: Of course they have not said so. This is an invitation to them to let us know.
Monstrous allegations were made by the hon. Member for Rushcliffe about abuse, fraud, cheating and lying by manufacturing industry to get their hands on grants. Hansard will show that he said that companies that he has visited as an official Opposition spokesman admitted to him in confidence that the projects concerned would have gone ahead anyway and that the timing was not influenced in any way by Government grants.
The hon. Gentleman did not accept my invitation, but on the basis that the diary of an Opposition spokesman should not be a State secret, I invite the hon. Member—or I shall write and ask him or his chief, the right hon. Member for Leeds, North-East (Sir K. Joseph), who has now left—to publish a list of his industrial visits over the last 12 months. If he does not do it, I shall ask Tory Central Office to publish it.

Mr. Kenneth Clarke: rose—

Mr. Rooker: Is the hon. Gentleman seeking to intervene? It took him a long while to give way to me earlier in the debate.

Mr. Clarke: First, I assure the hon. Member that we shall continue to publish the names of companies which receive grants. But there was a different atmosphere when we were in power and disbursing 12 grants a year at the most, and in one year no grants at all, from that which obtains when we are talking about £250 million. There is no intention at all to publish my diary. I invite the hon. Member, when he next visits a firm which has had a grant under the Industry Act, to make some inquiries, as I have done, and to discover whether he can adhere to his belief that they are making investment solely because they have had a section 8 grant—investment which would not have happened but for that grant.

Mr. Rooker: When I speak to members of companies, those are the kinds of questions I ask, anyway. If I found a management which said "We lied and cheated the taxpayer", I would report it to the Department of Industry. Members of the Tory Party laugh—

Mr. Brian Sedgemore: The party of organised fraud.

Mr. Kilroy-Silk: It is all right if it is a Tory fiddle.

Mr. Rooker: That is a typical reaction of them, because they are the party that protects big business when it wants to cheat the taxpayer. They laughed last week when we discussed tax abuse on Scotch whisky and they are laughing again tonight.
I stand by what I said—I would report it if anyone cheated. For that reason, of course, managements would not tell me the truth. It is only because they know that the Tory Party is in their pockets and that the Opposition will not report these companies to the Ministers responsible for making sure that taxpayers' money is spent wisely that they make these statements to them.
I do not see why there should be any secrecy about the diary of an Opposition spokesman who makes the claim that he goes around industry as an Opposition spokesman. I shall invite Tory Central

Office to make it public. Certainly the rest of the trivia is published. I do not see why the hon. Gentleman's programme should not be published.

Mr. Clarke: The hon. Member is using words such as "lying" and "cheating" as if there are some firmly laid down criteria which it is illegal not to follow. What I am saying is that they do not follow the criteria which the Minister says they follow when making their decisions. If he wants to know what they comply with, will he study paragraph 9 of the criteria laid down by the Government? It says:
There are circumstances in which company profits and losses are not a wholly accurate measure of resource costs and benefits, because there are costs … and benefits … which accrue to the community as a whole and not to the individual enterprise. In these situations there are grounds for setting out to redress that divergence between money costs and benefits and social costs and benefits, where by taxation, planning controls or subsidies.
I am saying that the criteria include meaningless verbiage of that kind which allows the Minister and anybody else at his discretion to do what he chooses.

Mr. Rooker: Hansard will show that the hon. Gentleman admitted that firms were fraudulently claiming the grants. If that is not lying and cheating to get their grubby little hands on taxpayers' money, I do not know what is.
I know that the hon. Gentleman will come to regret the language that he used. That is why he is trying to wriggle out of it. I hope that my Labour colleagues in this debate will push home this point. The hon. Gentleman has offered us a hook on which we can hang him and the rest of the Tory Party.

11.27 p.m.

Mr. Nick Budgen: My hon. Friend the Member for Rushcliffe (Mr. Clark) is well able to look after himself in answering the allegations which have so falsely been made against him.
I want to deal with the Minister's allegation that the Opposition are being niggardly in talking so meanly about a little matter of £250 million. It has been said that we should let this go through "on the nod". What is £250 million between friends? It is only something that the taxpayer can cough up. But


Opposition Members believe that in dealing with the taxpayers' money, a little care should be given to these matters. It is interesting to examine some of the things that have happened since we last discussed the disbursement of the taxpayers' money in very large sums.
On 10th April last we discussed support for industry, and more particularly investment in British Leyland, against the whole context of the money that was being spewed out by the National Enterprise Board. It was said by the Secretary of State for Industry that in every respect the Government were being most careful with the taxpayers' money. Yet in the month or so that has followed we find that in two important respects the way in which the Secretary of State presented his case has been confounded by the facts.
I noted his reference to the foundry industry, because it so happens that I recently inherited a few shares in a foundry. [HON. MEMBERS: "Oh".] There is nothing wrong with that, so far as I know. They are only a few shares and, unhappily, they do not yield much income. I learned from my holding in that foundry that those in the foundry industry regarded the ferrous foundry scheme with considerable amusement and contempt, because there was gross overcapacity in that industry. While they were collecting the cash off the Government, they were anxious to say how useful the scheme was, but all they were doing was in some instances preventing firms going out of business which should have gone out of business, thus reducing the capacity of the industry, or in other instances providing cheap money which could have come from ordinary private sources but for the fact that the taxpayer was making it available.
Before the British Leyland debate, I heard a lot of concern expressed in the West Midlands that British Leyland might acquire its own foundries, but, of course, that matter was very well dealt with by the Secretary of State during the debate, on 10th April, when he said:
Even the provision of £450 million, which the National Enterprise Board has determined, after careful consideration, is the sum required for 1978, means that some desired programmes have had to be cut back—for example, the foundry modernisation programme.
But what do we find in today's Financial Times? British Leyland is undertaking

its own investment programme in foundries at a cost of £27 million. So much for the Secretary of State's assertions and so much for the fears that he was trying to allay in the West Midlands foundry industry.

Mr. Adley: I merely wish to confirm that my hon. Friend is correct. I was invited to meet the trade unionists at Wellworthy Engineering, the largest employers in my constituency, and they pleaded with me to make sure that the Government did not allow British Leyland to go into the components business because they did not want to see their worthwhile jobs in a profitable private enterprise company swamped by public money and publicly subsidised companies such as British Leyland.

Mr. Budgen: I am grateful to my hon. Friend. I have no doubt that he will send his informants a copy of the back page of today's Financial Times.

Mr. Adley: And my hon. Friend's speech.

Mr. Budgen: I am grateful to my hon. Friend. The second indication of the sloppy way in which the Government are handing out taxpayers' money can be shown in the answer to a question I asked during the debate last month. I asked the Secretary of State why there could not be a more modest objective for the NEB and why successful firms such as Ferranti could not be sold. He replied:
I do not know whether the hon. Gentleman was in the House earlier when this question was raised.
I think that I was, but let it be assumed against me that I did not properly take in the earlier remarks. Perhaps I was sleeping, stupid, or whatever, but I invite the House to listen to these words of the Secretary of State:
I made it plain that none of the NEB's profitable companies, particularly those making up British Leyland, are for sale. I do not think that that would be the way to go about it. That is not recommended by the NEB, which consists of senior industrialists and senior trade unionists. It is not recommended by the board of British Leyland. That would serve only to demoralise existing management and create unnecessary fears."—[Official Report, 10th April 1978; Vol. 947, cc. 100, 1009.]
But what do I read in The Times of 6th May, just a month after that splendid and clear-cut assertion of the Secretary


of State that no part of the NEB portfolio was for sale? Under the heading:
Ferranti ready for Stock Exchange listing
there is a story that reads:
Merchant bankers Barings, who are working on the return of electronics group Ferranti to the Stock Market have not yet decided whether to advise a listing in july.
Work is well advanced on the introduction of 1,333,333 shares to be offered by the National Enterprise Board, which now owns 62.5 per cent of Ferranti. It is known that Barings have been advising Ferranti for some time, but key details have still to be settled.
Yet the Secretary of State had the effrontery to tell the House that no part of the NEB portfolio was for sale or was contemplated as being for sale. He said that any such sale would discourage existing management. Are the Opposition not right to say that a little care, a little truth and a little precision is required when taxpayers' money is being dished out?

11.30 p.m.

Mr. Ted Leadbitter: I wish only to put to the House what I consider to be a small but important, pertinent matter of fact.
The hon. Member for Rushcliffe (Mr. Clarke), unfortunately, made a regrettable statement. He said that in the case of all the companies which he had visited the industrialist who had gained financial support under Section 8 had clearly and distinctly said that if he had not had the money the schemes would still have gone on. One of the conditions which must be met in writing in order to qualify for assistance under Section 8 is that the industrialist must say that without the aid the schemes would not go on.
It is clear that there is an allegation of misrepresentation, to say the least, or of fraud. Therefore, I must ask, not the hon. Gentleman but the Minister, whether this important matter will be taken up through the usual channels so that the House may be satisfied about it.

Mr. Alan Williams: My hon. Friend has asked me a question and I shall mention it in my reply, but I draw to his attention the fact that an imputation has been made, by implication, against a firm in his constituency. Tioxide, in Hartlepool, has indicated that it is willing to say publicly that it conforms to all the guidelines. I wonder what my hon. Friend's view is about the fact that a firm in his

constituency which has received Government support has been maligned by a member of the Opposition Front Bench.

Mr. Kilroy-Silk: Does my hon. Friend also appreciate that the attitude of the hon. Member for Rushcliffe (Mr Clarke) demonstrates the traditional double standards of the Tories on this issue? They will complain about social security scroungers, with whom none of us has sympathy and whom we want prosecuted, but the hon. Gentleman tonight has clearly announced that he knows of several industrialists who have told him that they have perpetrated fraud with taxpayers' money involving several million pounds, and yet he laughs. He is either a liar—he does not have the evidence—

Mr. Deputy Speaker (Mr. Oscar Murton): Order. I hope that the hon. Gentleman was not accusing the hon. Member for Rushcliffe (Mr Clarke) of being a liar. The hon. Gentleman will confirm to me that he was not using that expression in connection with the hon. Member.

Mr. Kilroy-Silk: The hon. Gentleman either has the evidence or he is an accomplice. He is either a liar or he is an accomplice.

Mr. Deputy Speaker: Order. I have warned the hon. Gentlemen that if he is using that expression in connection with the hon. Member for Rushcliffe, he must withdraw it.

Mr. Sedgemore: He is an accomplice to crime.

Mr. Kilroy-Silk: I am perfectly happy to withdraw the imputation that the hon. Gentleman is a liar. He is therefore an accomplice—

Mr. Sedgemore: —to crime.

Mr. Kenneth Clarke: rose—

Mr. Leadbitter: No. I shall not give way to the hon. Gentleman, because there are ways in the House in which these matters can be settled. They can be settled by means of the custom that if a statement has been made which is seen in the light of discussion not to be true the hon. Member concerned is given the opportunity to correct it.

Mr. Ian Gow: On a point of order, Mr. Deputy Speaker.
The hon. Member for Luton, West (Mr. Sedgemore) accused my hon. Friend the Member for Rushcliffe (Mr. Clarke) of being an accomplice to crime. Is not that out of order?

Mr. Deputy Speaker: No remark must be made which casts any imputation on the honour of an hon. Member. I hope that the hon. Gentleman did not in fact use that expression, because the Chair did not hear it. [HON. MEMBERS: "He did."] The hon. Gentleman must withdraw any comment which has any imputation on the honour of any other hon. Member.

Mr. Kilroy-Silk: Further to that point of order, Mr. Deputy Speaker—

Mr. Deputy Speaker: Order. I am asking the hon. Member for Luton, West (Mr. Sedgemore) to withdraw any such remark.

Mr. Kilroy-Silk: It was I, not my hon. Friend the Member for Luton, West (Mr. Sedgemore), who made the allegation, Mr. Deputy Speaker. The hon. Member for Rushcliffe clearly made the allegation against himself when he said that he knew of many industrialists who had told him that they had taken taxpayers' money and they did not need that money. They had therefore lied to the Department of Industry in purporting to fulfil the criteria, and the hon. Member either does not have the evidence, in which case he is lying, or he is an accomplice to the criminal acts of others.

Mr. Deputy Speaker: Order. The hon. Member is compounding what I have already told him was wrong. He must make no imputation on the honour of any other hon. Members, and he must withdraw the allegations forthwith.

Mr. Kilroy-Silk: I have no wish to pursue this, Mr. Deputy Speaker, and I shall certainly withdraw both the allegations in the sure knowledge and confidence that the hon. Member for Rushcliffe made both the allegations about himself, and that they will be on the record in Hansard.

Mr. Leadbitter: I do not want to follow the level or form of discussion at this stage on the matter which has developed—

Mr. Kenneth Clarke: rose—

Mr. Leadbitter: I shall give way in a moment [HON. MEMBERS: "Give way now."] No.

Mr. Deputy Speaker: Order. The hon. Member who has the Floor cannot be pressed to give way unless or until he is prepared to do so.

Mr. Leadbitter: I have given way reasonably sufficiently on what I call—

Mr. Clarke: On a point of order, Mr. Deputy Speaker. I am grateful to you for giving me protection against the allegations by the hon. Member for Luton, West (Mr. Sedgemore), who was not here earlier, and by the hon. Member for Ormskirk (Mr. Kilroy-Silk), who did not seem to have listened to the earlier stages of the debate. But as for the hon. Member for Hartlepool (Mr. Leadbitter), am I entitled to some protection against this tremendous concoction of a speech which he is producing, all based on an interpretation of what I am supposed to have said, which I did not in fact say, when it is within the recollection of the House that I accused nobody in the firms I visited of crime or fraud. No crime or fraud has been spelt out, and therefore there is no question of my being party to any of the matters which the hon. Member for Hartlepool is describing.

Mr. Leadbitter: Apart from lowering the tone of the debate, the hon. Member knows full well what he is now doing. It is not for me to challenge the Chair, but I make the point that the hon. Member is abusing the privileges of the House, because that was not a point of order.
I want to make this clear. In my constituency there is a firm which is benefiting from aid under Section 8 of the Act. I will not stand aside and allow an industrialist to be accused in the manner in which the hon. Member accused such a person, knowing full well that the conditions upon which that industrialist gets aid under the Act are set down in writing and he makes the claim that if he does not get the aid the schemes will not go on. That is the issue.

Mr. Clarke: On a point of order, Mr. Deputy Speaker. Is the hon. Member entitled to accuse me of accusing a firm in his constituency of crime?

Mr. Leadbitter: The hon. Gentleman should visit Hartlepool.

Mr. Clarke: I have visited Hartlepool—I do not whether the hon. Gentleman has—with the past year, but I did not visit the particular firm.

Mr. Deputy Speaker: Order. I think that a large misconception is growing in the House. We had better return to the subject of the debate.

Mr. Leadbitter: This is an important matter. No hon. Members would say that they wanted firms in their constituencies to be deprived of the aid. When we support it, we have a right to ask whether the Opposition Front Bench has sufficiently attuned itself to the needs of industry, rather than making misrepresentations about industrialists.
If it is a condition that an industrialist who receives aid under the Act must put in writing the fact that if he does not receive the money the scheme does not go ahead, anyone who says that he takes the money in spite of that, in the way that the hon. Gentleman did, is saying that such an industrialist is not fair.
I close on this point, because I want to hear what my right hon. Friend the Minister has to say. The hon. Gentleman went further and said, in effect, that because industrialists received the aid in any case there were conditions attached on incomes policy. Surely he understands that if they do not want to be tied to any conditions, if they exist, they need not take the money.
In my constituency 17 per cent. of the men are out of work and far too many young children have left school without a chance of a job. The House would be wise to support any steps taken by the Government to pump investment into industry in the regions that I help represent—Merseyside, Scotland, Wales and the North-East.

11.42 p.m.

Mr. Alan Williams: With permission, I should like to reply.
Without wishing to inflate the importance of what has happened tonight, I think that we have had an example of silliness on the part of the Opposition Front Bench, which they will probably regret later. No matter how he wriggles, the hon. Member for Rushcliffe (Mr. Clarke) said in his speech that all the firms to which he had spoken which had received assistance from Government said

that their projects would have gone ahead regardless of that assistance.
That was said despite the fact that, for example, under the selective assistance scheme additionality is a clear requirement in the published rules related to the scheme. I am forced to wonder whether the hon. Gentleman realises the seriousness of making allegations that firms such as Wedgwood, Tioxide, in the constituency of my hon. Friend the Member for Hartlepool (Mr. Lead bitter), Vickers, Albright and Wilson and Ham-worthy Engineering have deliberately lied to Government and deliberately taken taxpayers' money unduly.
The hon. Gentleman has a choice. He is caught over his own barrel. If he says that every firm mentioned by me was not covered, his argument is basically invalid, because obviously the schemes have been highly effective. Therefore, if he wants to perpetuate his argument he must be able to show that in most cases the argument that he put forward is true. Let me demonstrate that it clearly is not true.
This is not a case of civil servants unversed in the ways of industry being misled by industry. The Industrial Development Unit in our Department consists of financial specialists brought from the private sector of industry to assess these projects. Under the selective investment scheme, while 66 schemes have been approved, 50 having been turned down, most of them because those concerned were not able to convince us that they met our requirements.

Mr. Kenneth Clarke: rose—

Mr. Williams: I do not intend to give way to the hon. Gentleman.

Mr. Clarke: Give way.

Mr. Williams: I have no intention of giving way, with three minutes to go. It is easy to see why industry is frightened of the Opposition. The Opposition are playing politics with a matter of extreme importance to the survival of industry and to employment.

Mr. Clarke: rose—

Mr. Williams: When they were last in Government the Opposition were completely incapable of stimulating investment. It fell year by year while they were in office. The then Prime Minister


berated industry. The right hon. Member for Leeds, North-East (Sir K. Joseph) was a member of that Cabinet. He will recollect the then Prime Minister's speech. Did not the then Prime Minister say that industry had refused to respond to all the measures which a Conservative Government had introduced to stimulate investment? They were furious with industry. By the time the Tories left office they had failed to equal the level of investment attained in the year in which the previous Labour Administration had left office

Mr. Clarke: rose—

Mr. Williams: Conservative Members are making the same worrying noises they made in 1969. They are speaking against the whole principle of the grants system. Let us remember that they abolished grants, discovered their error, and, two years later, reintroduced them. In those two years they destroyed the growth in industry which had taken place under a Labour Government. They were never able to bring it to life again. This Government have been left with the task of trying to regenerate the investment which industry desperately needs and from the lack of which it suffered when the Conservatives were in office.
What are we being accused of tonight? Wasting Government money in what way?

By stimulating £1,500 million worth of investment by these schemes; by getting a £200 million positive advantage on the balance of payments from the schemes we put forward; by creating extra jobs in the sectors where schemes apply and by creating extra jobs in industries which supply those sectors. These are apparently the sins of which Conservative Members accuse us. The fact is that under this Government productivity is rising again. The Opposition do not like that and do not want to recognise it. Investment is rising again. Private sector investment rose by 14 per cent. last year, something which Conservative Members never attained when in Government. All that they have to do is talk to people in the City and industry and find out what confidence there is in the Opposition.

Look at the share index—316 when the Tories left office, now nearly 500. Look at what happened when it appeared likely that the Government might suffer defeat—£1,000 million was wiped off the value of shares—

It being one and a half hours after the commencement of proceedings on the Motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted business).

The House divided: Ayes 234, Noes 211.

Division No. 222]
AYES
[11.48 p.m.


Abse, Leo
Conlan, Bernard
Ewing, Mrs Winifred (Moray)


Anderson, Donald
Cook, Robin F. (Edin C)
Faulds, Andrew


Archer, Rt Hon Peter
Cowans, Harry
Fernyhough, Rt Hon E.


Armstrong, Ernest
Cox, Thomas (Tooting)
Fitt, Gerard (Belfast W)


Ashley, Jack
Craigen, Jim (Maryhill)
Flannery, Martin


Atkins, Ronald (Preston N)
Crawford, Douglas
Fletcher, Ted (Darlington)


Atkinson, Norman
Crawshaw, Richard
Forrester, John


Bain, Mrs Margaret
Cronin, John
Fowler, Gerald (The Wrekin)


Barnett, Guy (Greenwich)
Crowther, Stan (Rotherham)
Fraser, John (Lambeth, N'w'd)


Bates, Alf
Cryer, Bob
Freeson, Rt Hon Reginald


Bean, R. E.
Cunningham, G. (Islington S)
Gilbert, Rt Hon Dr John


Beith, A. J.
Cunningham, Dr J. (Whiteh)
Ginsburg, David


Benn, Rt Hon Anthony Wedgwood
Dalyell, Tarn
Golding, John


Bennett, Andrew (Stockport N)
Davidson, Arthur
Gould, Bryan


Bidwell, Sydney
Davies, Bryan (Enfield N)
Graham, Ted


Bishop, Rt Hon Edward
Davies, Ifor (Gower)
Grant, John (Islington C)


Blenkinsop, Arthur
Davis, Clinton (Hackney C)
Grocott, Bruce


Boardman, H.
Deakins, Eric
Hardy, Peter


Boothroyd, Miss Betty
Dell, Rt Hon Edmund
Harrison, Rt Hon Walter


Bradley, Tom
Doig, Peter
Hart, Rt Hon Judith


Brown, Robert C. (Newcastle W)
Dormand, J. D.
Hattersley, Rt Hon Roy


Buchan, Norman
Douglas-Mann, Bruce
Hayman, Mrs Helena


Butler, Mrs Joyce (Wood Green)
Duffy, A. E. P.
Heffer, Eric S.


Callaghan, Jim (Middleton &amp; P)
Dunn, James A.
Henderson, Douglas


Campbell, Ian
Dunnett, Jack
Horam, John


Canavan, Dennis
Dunwoody, Mrs Gwyneth
Howell, Rt Hon Denis (B'ham, Sm H)


Carmichael, Neil
Eadie, Alex
Howells, Geraint (Cardigan)


Cartwright, John
Edge, Geoff
Hoyle, Doug (Nelson)


Clemitson, Ivor
Ellis, John (Brigg &amp; Scun)
Huckfield, Les


Cocks, Rt Hon Michael (Bristol S)
English, Michael
Hughes, Rt Hon C. (Anglesey)


Cohen, Stanley
Evans, Ioan (Aberdare)
Hughes, Mark (Durham)


Coleman, Donald
Evans, John (Newton)
Hughes, Robert (Aberdeen N)


Concannon, Rt Hon John
Ewing, Harry (Stirling)
Hunter, Adam




Irvine, Rt Hon Sir A. (Edge Hill)
Morris. Rt Hon Charles R.
Spearing, Nigel


Irving, Rt Hon S. (Dartford)
Morris, Rt Hon J. (Aberavon)
Spriggs, Leslie


Jackson, Miss Margaret (Lincoln)
Moyle, Roland
Stallard, A. W.


Jeger, Mrs Lena
Murray, Rt Hon Ronald King
Stewart, Rt Hon Donald


Jenkins, Hugh (Putney)
Newens, Stanley
Stewart, Rt Hon M. (Fulham)


Johnson, Walter (Derby S)
Noble, Mike
Stoddart, David


Jones, Alec (Rhondda)
Oakes, Gordon
Stott, Roger


Jones, Barry (East Flint)
Ogden, Eric
Strang, Gavin


Jones, Dan (Burnley)
Orbach, Maurice
Strauss, Rt Hon G. R.


Judd, Frank
Orme, Rt Hon Stanley
Summerskill, Hon Dr Shirley


Kaufman, Gerald
Ovenden, John
Swain, Thomas


Kerr, Russell
Palmer, Arthur
Thomas, Jeffrey (Abertillery)


Kilroy-Silk, Robert
Park, George
Thomas, Ron (Bristol NW)


Lamborn, Harry
Parker, John
Thompson, George


Latham, Arthur (Paddington)
Pavitt, Laurie
Thorne, Stan (Preston South)


Leadbitter, Ted
Pendry, Tom
Tierney, Sydney


Lestor, Miss Joan (Eton &amp; Slough)
Phipps, Dr Colin
Tilley, John (Lambeth, Central)


Lewis, Ron (Carlisle)
Prescott, John
Tinn, James


Lomas, Kenneth
Price, C. (Lewisham W)
Tomlinson, John


Loyden, Eddie
Price, William (Rugby)
Urwin, T. W.


Luard, Evan
Radice, Giles
Varley, Rt Hon Eric G.


Lyon, Alexander (York)
Rees, Rt Hon Merlyn (Leeds S)
Wainwright, Edwin (Dearne V)


Lyons, Edward (Bradford W)
Richardson, Miss Jo
Walker, Harold (Doncaster)


Mabon, Rt Hon Dr J. Dickson
Roberts, Albert (Normanton)
Walker, Terry (Kingswood)


McCartney, Hugh
Roberts, Gwilym (Cannock)
Watkins, David


McDonald, Dr Oonagh
Robinson, Geoffrey
Watkinson, John


McElhone, Frank
Roderick, Caerwyn
Watt, Hamish


MacFarquhar, Roderick
Rodgers, George (Chorley)
Wellbeloved, James


McGuire, Michael (Ince)
Rodgers, Rt Hon William (Stockton)
Welsh, Andrew


MacKenzie, Rt Hon Gregor
Rooker, J. W.
White, Frank R. (Bury)


Maclennan, Robert
Roper, John
White, James (Pollok)


Madden, Max
Rose, Paul B.
Whitehead, Phillip


Magee, Bryan
Ross, Stephen (Isle of Wight)
Whitlock, William


Mahon, Simon
Rowlands, Ted
Williams, Rt Hon Alan (Swansea W)


Mallalieu, J. P. W.
Ryman, John
Williams, Alan Lee (Hornch'ch)


Marks, Kenneth
Sandelson, Neville
Wilson, William (Coventry SE)


Marshall, Dr Edmund (Goole)
Sedgemore, Brian
Wise, Mrs Audrey


Marshall, Jim (Leicester S)
Sever, John
Woodall, Alec


Maynard, Miss Joan
Shaw, Arnold (Ilford South)
Woof, Robert


Mellish, Rt Hon Robert
Sheldon, Rt Hon Robert
Wrigglesworth, Ian


Mikardo, Ian
Shore, Rt Hon Peter
Young, David (Bolton E)


Millan, Rt Hon Bruce
Silkin, Rt Hon John (Deptford)



Miller, Dr M. S. (E Kilbride)
Silkin, Rt Hon S. C. (Dulwich)
TELLERS FOR THE AYES:


Mitchell, Austin
Silverman, Julius
Mr. Joseph Harper and


Mitchell, R. C. (Soton, Itchen)
Skinner, Dennis
Mr. James Hamilton.


Moorman, Eric
Smith, John (N Lanarkshire)



Morris, Alfred (Wythenshawe)
Snape, Peter





NOES


Adley, Robert
Critchley, Julian
Hampson, Dr Keith


Aitken, Jonathan
Davies, Rt Hon J. (Knutsford)
Hannam, John


Alison, Michael
Dodsworth, Geoffrey
Harrison, Col Sir Harwood (Eye)


Arnold, Tom
du Cann, Rt Hon Edward
Haselhurst, Alan


Atkins, Rt Hon H. (Spelthorne)
Dunlop, John
Hawkins, Paul


Atkinson, David (Bournemouth, East)
Durant, Tony
Hayhoe, Barney


Awdry, Daniel
Dykes, Hugh
Hicks, Robert


Banks, Robert
Eden, Rt Hon Sir John
Higgins, Terence L.


Bendall, Vivian (Ilford North)
Edwards, Nicholas (Pembroke)
Hodgson, Robin


Bennett, Sir Frederic (Torbay)
Elliott, Sir William
Holland, Philip


Benyon, W.
Eyre, Reginald
Hordern, Peter


Berry, Hon Anthony
Fairbairn, Nicholas
Howell, David (Guildford)


Biffen, John
Fairgrieve, Russell
Howell, Ralph (North Norfolk)


Biggs-Davison, John
Farr, John
Hunt, David (Wirral)


Blaker, Peter
Finsberg, Geoffrey
Hunt, John (Bromley)


Body, Richard
Fisher, Sir Nigel
Hurd, Douglas


Boscawen, Hon Robert
Fletcher, Alex (Edinburgh N)
James, David


Boyson, Dr Rhodes (Brent)
Forman, Nigel
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)


Brittan, Leon
Fowler, Norman (Sutton C'f'd)
Jessel, Toby


Brooke, Peter
Fox, Marcus
Jones, Arthur (Daventry)


Brotherton, Michael
Fraser, Rt Hon H. (Stafford &amp; St)
Joseph, Rt Hon Sir Keith


Brown, Sir Edward (Bath)
Fry, Peter
Kaberry, Sir Donald


Buck, Antony
Galbraith, Hon T. G. D.
Kellett-Bowman, Mrs Elaine


Budgen, Nick
Gardiner, George (Reigate)
Kershaw, Anthony


Burden, F. A.
Gardner, Edward (S Fylde)
Kimball, Marcus


Butler, Adam (Bosworth)
Godber, Rt Hon Joseph
King, Evelyn (South Dorset)


Carlisle, Mark
Goodhart, Philip
King, Tom (Bridgwater)


Channon, Paul
Goodhew, Victor
Kitson, Sir Timothy


Churchill, W. S.
Gorst, John
Knight, Mrs Jill


Clark, Alan (Plymouth, Sutton)
Gow, Ian (Eastbourne)
Knox, David


Clarke, Kenneth (Rushcliffe)
Gower, Sir Raymond (Barry)
Latham, Michael (Melton)


Cooke, Robert (Bristol W)
Grieve, Percy
Lawson, Nigel


Cope, John
Griffiths, Eldon
Le Merchant, Spencer


Cormack, Patrick
Grist, Ian
Lester, Jim (Beeston)


Corrie, John
Hamilton, Archibald (Epsom &amp; Ewell)
Lewis, Kenneth (Rutland)


Costain, A. P.
Hamilton, Michael (Salisbury)
Lloyd, Ian




Loveridge, John
Nott, John
Smith, Dudley (Warwick)


Luce, Richard
Onslow, Cranley
Smith, Timothy John (Ashfield)


McCrindle, Robert
Osborn, John
Speed, Keith


Macfarlane, Neil
Page, John (Harrow West)
Spence, John


MacGregor, John
Page, Rt Hon R. Graham (Crosby)
Spicer, Michael (S Worcester)


MacKay, Andrew (Stechford)
Page, Richard (Workington)
Sproat, Iain


Macmillan, Rt Hon M. (Farnham)
Pattie, Geoffrey
Stainton, Keith


McNair-Wilson, M. (Newbury)
Percival, Ian
Stanbrook, Ivor


McNair-Wilson, P. (New Forest)
Peyton, Rt Hon John
Stanley, John


Marshall, Michael (Arundel)
Pink, R. Bonner
Steen, Anthony (Wavertree)


Mates, Michael
Powell, Rt Hon J. Enoch
Stokes, John


Mather, Carol
Prentice, Rt Hon Reg
Stradling, Thomas, J.


Mawby, Ray
Price, David (Eastleigh)
Taylor, Teddy (Cathcart)


Maxwell-Hyslop, Robin
Prior, Rt Hon James
Tebbit, Norman


Mayhew, Patrick
Raison, Timothy
Temple-Morris, Peter


Meyer, Sir Anthony
Rathbone, Tim
Thomas, Rt Hon P. (Hendon S)


Miller, Hal (Bromsgrove)
Renton, Rt Hon Sir D. (Hunts)
Townsend, Cyril D.


Mills, Peter
Renton, Tim (Mid-Sussex)
van Straubenzee, W. R.


Miscampbell, Norman
Rhodes James, R.
Vaughan, Dr Gerard


Mitchell, David (Basingstoke)
Rhys Williams, Sir Brandon
Viggers, Peter


Moate, Roger
Ridley, Hon Nicholas
Wakeham, John


Molyneaux, James
Roberts, Michael (Cardiff NW)
Walder, David (Clitheroe)


Monro, Hector
Roberts, Wyn (Conway)
Walker, Rt Hon P. (Worcester)


Montgomery, Fergus
Ross William (Londonderry)
Warren, Kenneth


Moore, John (Croydon C)
Rossi, Hugh (Hornsey)
Weatherill, Bernard


Morgan, Geraint
Royle, Sir Anthony
Wells, John


Morgan-Giles, Rear-Admiral
Sainsbury, Tim
Whitelaw, Rt Hon William


Morris, Michael (Northampton S)
Scott, Nicholas
Whitney, Raymond (Wycombe)


Morrison, Charles (Devizes)
Scott-Hopkins, James
Wiggin, Jerry


Morrison, Hon Peter (Chester)
Shaw, Giles (Pudsey)
Wood, Rt Hon Richard


Mudd, David
Shaw, Michael (Scarborough)
Younger, Hon George


Neave, Airey
Shelton, William (Streatham)



Nelson, Anthony
Shepherd, Colin
TELLERS FOR THE NOES:


Neubert, Michael
Shersby, Michael
Sir George Young and


Newton, Tony
Silvester, Fred
Lord James Douglas-Hamilton.


Normanton, Tom
Sims, Roger

Question accordingly agreed to.

Resolved,
That the draft Financial Assistance for industry (Increase of Limit) Order 1978, which was laid before this House on 28th April, be approved.

Orders of the Day — EXPENDITURE

Ordered,
That the Standing Order of 18th November 1974 relating to the nomination of the Expenditure Committee be amended by leaving out Mr Max Madden and inserting Dr. Jeremy Bray.—[Mr. Walter Harrison.]

Orders of the Day — KEPONE (INCINERATION)

Motion made, and Question proposed,

That this House do now adjourn. [Mr. Snape.]

12.3 a.m.

Mr. Leo Abse: No one—certainly not one of my constituents—doubts the compelling necessity to have controlled disposal centres to deal with the problems of toxic waste disgorged by modern industry. As a result of the initiatives coming from the Department of the Environment no one doubts that many problems that would otherwise have arisen have been contained. For that the Department deserves high praise. However,

the encouragement given by the Department to waste disposal industries must not be so generously given that citizens in areas where such plants are sited may come to the conclusion that the Government are more concerned about the needs of industry than the needs of men and women.
If the waste disposal plants are so conducted that they provoke resentment, hositilty and fear from those who live for miles around their curtilage, the good work of the Department may be undone by the irresponsibility of the management. That, unhappily, is what has happened in my constituency.
Re-Chem International Ltd., a waste disposal firm, backed by the huge resources of its parent company, British Electric Traction, six years ago applied for planning permission to a non-suspecting small district council—the Torfaen District Council. Eager, as are all South Wales councils in areas threatened by or enduring high unemployment, to welcome new work into the district, the council gave it permission. The company obtained its planning permission by deception or by its overweening misplaced confidence in its own technological capacities, for it assured the council that the works would in no way impinge upon the amenity of the nearby estates.
Almost from the time that the works commenced operation a yawning gap appeared between the company's promises and its performance. Noxious fumes, smokes and smells regurgitated out of the stack, sometimes by day and sometimes by night. Protests mounted from residents in the area as all the claimed modifications to the incinerator plant resulted in no material diminution in the grave inconveniences being suffered.
The Welsh Office, at my request, with the aid of my hon. Friend the Under-Secretary of State for the Environment—the Member for Manchester, Gorton (Mr. Marks)—co-operated, by means of the participation of the Alkali Inspectorate, in a liaison committee which included representatives of the local authority, of Re-Chem, and of the residents' environmental association. However, despite the monitoring and the promises of further avoiding action by the company, that has been of no avail. The nuisance continues, with the residents collecting funds to commence legal action against the company.
The local authority is inhibited from suspending the company's licence only by fear that that may result in millions of pounds worth of compensation having to be paid by hapless ratepayers. That would be payment to swell BET profits, which Sir John Spencer Wills, the company's chairman, recently told shareholders rose to a record figure of £55 million. When Mr. Wills announced the profits he complained bitterly about the time that his company wasted on dealing with the controlling legislation that had come from the Labour Government, and declared that
Profits are the lifeblood of the nation.
At the same time he announced the company's usual annual subsidy to the Conservative Party.
In the light of experience my constituents believe that their lives would be happier if there were more controls on this company and less profit. I should have thought that with two Tory ex-Ministers on the Board—Viscount Colville and Christopher Chataway—the company would have sufficient political sensitivity not to inflame an already highly combustible situation which many of us have sought to contain in recent years.
But the company's avid and reckless search for profits continues unabated. Now it has provocatively announced its

decision to import from the United States of America for incineration at Pontypool a deadly pesticide which has wrought such havoc in the Virginia-Maryland coastland region by its release into the estuarine atmospheric environment that its use has been banned in the United States as it has been here.
The two companies which manufacture this insecticide have received the highest fines for pollution ever imposed in the United States—$13·2 million and $3·8 million. The people of the United States have been so shocked by the disaster, made so aware of the serious illnesses. including sterility, among the workers and their families at the Kepone manufacturing plant, and are so fearful that it might cause cancer, through dissemination in the food chain—as stated by distinguished scientists—that no state in America is prepared to be the site at which an attempt can be made to dispose of the stocks that have accumulated.
In the United States, the most highly developed technological country in the world, no state is prepared to permit an attempt to dispose of the material on its soil. But that does not deter Re-Chem with its insouciance and rare arrogance. It claims, despite its wretched track record at Pontypool and despite being convicted only a few weeks ago, in Scotland, for its reckless pollution at the plant in the constituency of my hon. Friend the Member for West Stirlingshire (Mr. Canavan), that it alone has perfected the technology to dispose of this poison and wishes to import 1½ tons for a trial run. After what is necessarily an innovatory experiment it proposes to import another 35 tons.
It is my duty to warn the Minister that my constituents are not prepared to be guinea-pigs. With Government aid, Wales is only just clearing away the debris and tips which an irresponsible British capitalism left behind. South Wales is not prepared to become a receptacle for the excreta of an incontinent sector of American capitalism. No Minister, no Health and Safety Executive, no company can give a 100 per cent. guarantee that the incineration of Kepone will have no attendant environmental risks, because it has never been done on this scale before.
If Re-Chem has the technology, let the Government tell it to sell it to the United States. Let Kepone be incinerated on American soil or waters. The Secretary


of State has the power to make regulations forbidding the import of such poisons. If he exercises that power he will have the full support of the House. If he does not, and Kepone makes its way to my constituency, a confrontation will take place with the whole of the community.
Womens' institutes, Methodist chapels, union branches, my constituency party and council, apart from the environmental associations, urge me to persuade the Minister to ban Kepone's entry. We have too many unfulfilled promises from BET, the parent company of Re-Chem.
One of its subsidiaries, Rediffusion, came into my constituency with full support from the Government, the new town corporation and myself, deceiving us into the belief that its advanced technology was so certain that it would expand rapidly in the field of navigational satellite-assisted aid. The advanced technology ended in a shambles and led to the closure of the works, with hundreds of my constituents being made brutally redundant. The technological and safety skills now being pleaded by BET's Re-Chem subsidiary understandably, therefore, fall on deaf ears.
I appreciate that the Department of the Environment has a difficult task trying to persuade people that modern industry must have the facilities with which to dispose of its wastes. Acceptance that that need exists can be secured only by the community's gaining increased confidence that it can be done safely and without disruption. The past record of Re-Chem at Pontypool has caused that confidence to be forfeited, and the Department would be unwise to give the company the opportunity to challenge the community's view.
If Kepone came to Ponytpool I would regard it as my duty, as my mayor regards it as his, to picket the factory in a bid to stop its entry to the incinerator plant. I do not doubt that my constituents, of all political views, would join me. In the eastern valley we are a law-abiding community, and therefore we look to the Minister to use to the full the powers of the law that are at his disposal.

12.11 a.m.

Mr. Dennis Canavan: I also declare a constituency interest, in that the company referred to

by my hon. Friend the Member for Pontypool (Mr. Abse) also has a disposal plant in my constituency at Bonnybridge. Since the plant was built there, and since I became the Member of Parliament for West Stirlingshire, I have received many complaints from constituents about the atmospheric pollution caused by it. I suspect that part of the reason for this has been that initially the company received the co-operation of the local planning authority, which was deeply concerned to secure the creation of jobs. There is no doubt that my hon. Friend the Member for Pontypool had that concern in respect of his area.
It is clear now that the planning decision by the former Stirling County Council was a bad one, in that the plant is located in a low-lying hollow and that it is therefore difficult adequately to disperse the fumes that it produces.
Although measures have recently been taken by the company to increase the length of the chimney stack, constituents still complain to me. Recently, after I reported certain matters to the inspectorate based in the Scottish Office, certain steps were taken and suggestions were made to the company, but a prosecution against the firm has been carried out at Falkirk sheriff court.
In addition to these problems, there is now the threat at Bonnybridge of the importation of this dangerous chemical Kepone. I have tabled Questions to the Department of the Environment and the Scottish Office on the matter. On 5th May I received a reply from the Department of the Environment, telling me that the Health and Safety Executive had issued a prohibition notice to prevent the disposal of the chemical at the Pontypool plant, for which it had been destined. That information perturbed me somewhat. I thought that it was reasonable enough to prohibit the importation of the chemical into Pontypool, but I was anxious lest Bonnybridge would then be chosen as the place at which it should be disposed of.
I therefore tabled a Question to my right hon. Friend the Secretary of State for Scotland and was told on 9th May that the Secretary of State,
has informed the company that he will issue a prohibition notice to prevent the disposal of Kepone at its Bonnybridge works unless and until he is fully satisfied that the disposal


could go ahead without causing any environmental damage."—[Official Report 9th May 1978; Vol. 949, c. 483–4.]
It appears from the difference in tenses used by the two Departments in those replies that before I had tabled my Question to the Scottish Office no prohibition order had been issued by my right hon. Friend the Secretary of State for Scotland. I should be grateful for clarification of that tonight.
My constituents, like those at Pontypool, want an assurance about this matter. It is true that we are concerned about jobs. I would not like to see the plant close down in my constituency, because jobs are at stake. I am also in continuous contact with the trade unions within the company. Nevertheless, we want an assurance not just about jobs but about the safety precautions which are absolutely essential not only for the workers in the plant itself but also for the people in the wider community.

12.15 a.m.

Mr. Bryan Gould: I am grateful to my hon. Friend the Member for Pontypool (Mr. Abse) not only for raising this important matter but for generously allowing me a few minutes in which to make some remarks.
The issue is of concern to my constituents, because one of the three plants operated by Re-Chem is at Fawley, just outside my constituency, which is the centre for a large population in Southampton. My constituents were naturally alarmed when they were led to believe, initially, that Kepone was to be brought to Fawley for incineration. I made a public statement expressing alarm at this possibility. This prompted a telephone call from the chairman of the company, who assured me that whatever else may happen, Kepone would not come to Fawley.
I accepted that assurance. I imagine that it still governs the situation. Therefore, I take it—I wish my hon. Friends all the luck in resisting the bringing of Kepone to Pontypool and Bonnybridge—that whatever may happen at those sites, Kepone is not coming to Fawley.
Nevertheless, although the immediate danger has been averted for my constituents, I believe that there are wider

issues, some of which I have already raised in a letter to my hon. Friend the Secretary of State. I am satisfied by the terms of his reply that he is taking the matter seriously.
I do not intend to traverse all the ground covered by my hon. Friend the Member for Pontypool, but there some specific questions which I hope my hon. Friend the Under-Secretary will be able to answer.
First, we are told—most improbably, it seems to me—that there is simply no one in the United States with the competence and technical capacity to deal with the incineration of this chemical. I believe that that is so unlikely that it cannot possibly be true. Surely the more likely explanation is that after the frightening, terrifying experience with this chemical in Virginia, no one in America is prepared to have anything further to do with it.
If we in this country, and Re-Chem in particular, are persuaded that we ought to have something to do with it, on the basis of the assurances given to us by the American company concerned with its manufacture, Allied Chemicals, let us be very careful indeed about that, because on this issue Allied Chemicals has a record of total irresponsibility. Indeed, it is still engaged in massive litigation in the United States, where it is denying responsibility for the tremendous damage which the chemical has caused.
The second question is, if Kepone is in fact, as I believe, so dangerous that no one in the whole of the vast United States is prepared to deal with it, how is it that Re-Chem can be so confident, since it has never dealt with it itself, that it can deal with it without danger to the public? If, again, Re-Chem is relying on assurances about the composition of the chemical and the ease of its destruction—assurances obtained from Allied Chemicals—I insist that those assurances be regarded with the greatest scepticism.
Finally, I urge my hon. Friend the Under-Secretary to take the point that although it is true that the public must be protected, it is equally true that the public must be seen to be protected. Therefore, if there is any doubt at all on this issue, I urge him to err on the side of safety.

12.17 a.m.

The Under-Secretary of State for the the Environment (Mr. Kenneth Marks): My hon. Friends the Members for Pontypool (Mr. Abse), Southampton, Test (Mr. Gould) and West Stirlingshire (Mr. Canavan) have raised for debate a matter of great importance to their constituents. It is a matter with national and international implications, too. My hon. Friend the Member for Pontypool talked about hostility, resentment and fear. We have heard the real concern expressed that a toxic substance, produced abroad, should be allowed to come into this country for disposal. We have had an account of the problems which Kepone caused in America and fears of what might happen if it were allowed into this country.
I fully understand why my hon. Friends should feel so strongly. It is right and proper that they should. I myself would not for one moment wish any disposal operation to go ahead if it appeared to pose an unwarranted risk to public health or to the environment. My right hon. Friend the Secretary of State for the Environment has powers, which he would not hesitate to use, to prohibit the importation of any substance if he considered it necessary for the purpose of protecting public health or the environment. He would be required to lay an order before the House for approval, so it is important to consider the facts carefully.
First, no decision has yet been made on whether or not the proposed incineration will go ahead. The proposal is at present the subject of a prohibition notice served by the Health and Safety Executive. This will not be lifted until the Executive has agreed on a safe system of work with the disposal company. I understand that discussions are going on between the firm and the Executive, but that it may take a considerable time before any decision is reached. This is, of course, a matter for my right hon. Friend the Secretary of State for Employment, who has responsibility for the Health and Safety Executive.
I urge my hon. Friends to put any facts they have—including any information from environmental health officers or councils in their constituencies—to the Executive and to the Secretaries of State for the Environment, for Wales and, now that my hon. Friend the Member for West Stirlingshire has intervened, for

Scotland. In the meantime, the consignment of Kepone is in Baltimore, Maryland. We have been given assurances that the firm has no intention of bringing it into this country until the necessary consents have been received.
Kepone is undoubtedly toxic and environmentally persistent. It is the trade name for the chemical chlordecone, which is used as a pesticide, primarily in the form of an ant and cockroach bait. It was manufactured in the United States of America for about 10 years by the Allied Chemicals Corporation, apparently without incident. Then, in 1974, Allied Chemicals transferred its manufacture to the Life Science Product Company.
By all accounts this was a very poorly managed operation; the manufacturing process itself was virtually uncontrolled. As a result, several employees suffered from Kepone poisoning. The health effects included disorders of the nervous system, liver, kidneys and testes. In addition the James River, in which there were important shellfish colonies, was extensively polluted.
In considering these alarming facts it is important to bear in mind that the work force at Life Science was permitted to remain in continuous and direct contact with the Kepone for over a year, and that the company discharged untreated Kepone waste direct to the sewerage system. This would not, of course, be the case if disposal went ahead in this country. The statutory controls on which we rely are extensive, as I shall remind the House in a moment.
The manufacture, sale and use of Kepone was banned in the United States in 1975, although I understand that the sale of existing stocks of ant and cockroach bait containing Kepone is still permitted. The Allied Chemical Corporation now apparently has for disposal about 60 tons of Kepone-contaminated waste. I am informed that although the States of Virginia and Maryland have prohibited the disposal of Kepone in their territories, there is no Federal ban on incinerating the substance.
Incineration of Kepone at 500 degrees to 700 degrees Centigrade for one second is quoted in the literature as sufficient for its safe destruction. The residues after incineration are carbon dioxide and a


solution of common salt and sodium carbonate in water. Some of the carbon dioxide would be discharged to atmosphere and the liquid effluent, after treatment, into the sewage system.
I must now attempt to answer the perfectly reasonable question why should we in this country have to dispose of American Kepone which they themselves consider too dangerous to handle?
In the first place we do not have to. There is no question of a dangerous substance being foisted on us. Re-Chem International Ltd, the United Kingdom waste disposal firm, entered into a voluntary arrangement with Allied Chemicals. The proposal was for a trial incineration of 10 tons of waste containing rather less than 1.5 tons of Kepone. While it is not my business to plead its case, Re-Chem is a reputable firm whose technical expertise and wide experience made it natural for Allied Chemicals to approach it. Its incinerator is capable of sustaining 1000 degrees c—as against the 500–700 degrees c quoted for the destruction of Kepone—for a longer burn than the one second also quoted. It seems unlikely that any comparable facilities in the United States are commercially available. The transfer could therefore, on a world basis, make environmental as well as economic sense.
I turn to the question of safety during transportation of the waste. The Kepone is at present packed in two inner polythene bags within a steel drum with a secure lid. The drums are stacked in threes on a pallet which is shrink-wrapped in polythene. Twenty-six such pallets, comprising 78 drums, are packed in a steel container which would not be unpacked until it reached its destination.
I turn to the controls which would apply. Under the Control of Pollution Act 1974, waste disposal plants and facilities in the United Kingdom are subject to licensing by the waste disposal authorities. In Wales and Scotland these are the district councils, and in England the county councils. Before issuing a licence a waste disposal authority is required to refer the proposals to certain statutory consultees, including the water authority and the Health and Safety Executive. The waste disposal authority may specify operating conditions in its licence. I am told that the Pontypool plant of Re-Chem International Ltd. has a valid disposal licence

whose terms would permit the incineration of Kepone and that no legal proceedings have ever been brought against the firm in respect of the operation of its Pontypool plant. My hon. Friend the Member for West Stirlingshire was right to say that the firm was fined £50 for incinerating iodine.
A waste disposal authority, however, is empowered under the Act to modify or revoke its disposal licence, and no doubt the Torfaen District Council will consider this course. It would obviously have to have solid grounds for doing so within the terms of the Act, and the firm would have a right of appeal, but the possibility is there.
The disposal licence, however, is not the only control. Effluent discharges must have the consent of the regional water authority; gaseous emissions are controlled by the alkali inspectorate and the Executive's factory inspectorate also needs to be satisfied about the safety of the work force and of the general public. Transport also has to be under stringent safeguards. Every phase of the operation would therefore be subject to control.
To sum up; at the moment the disposal is prevented by a prohibition notice issued by the Health and Safety Executive. It will not be lifted unless and until my right hon. Friend the Secretary of State for the Environment and my right hon. Friend the Secretary of State for Wales, and the Health and Safety Executive themselves are fully satisfied that the waste can be transported and disposed of without danger to health. Until it is lifted, there is no question of the waste being moved to this country. We shall not hesitate to use the powers available to us to prevent the import if they prove to be justified. But, equally, we could not apply them if a rigorous examination of the facts showed no unwarranted risk to be involved.
Finally, I wish to inform my hon. Friend the Member for Pontypool that I have received a request for a deputation to be seen by my Department, and I assure him that my hon. Friend the Under-Secretary of State and I will be glad to see them on this matter as soon as it can be arranged.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Twelve o'clock.